I’m embarrassed to admit it, but I love crunching numbers, especially when it comes to working out my monthly budget. However, I learned how to make a budget through trial and error and I’m still working out the kinks. So when I came upon this infographic and read the fine print, I realized I’ve been doing it all wrong! I’m supposed to define each category and allocate an amount (usually based on percents) first, then align my spending to fit that budget – or be “Pro-Active and tell my money where to go.” I’ve always done it backwards; tracking my spending, figuring out where I can save money, then creating a budget that sort of fits my spending patterns.
Look closer at this definition if budget:
As much as I have learned about personal finance through the school of hard knocks, there is still more to learn. At least I can pat myself on the back for the fact that I actually track my spending. Check out some more budgeting facts below: