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Question:


I need help crafting a realistic budget. Any and all suggestions would be appreciated.
-CyrusSamir


Answer:


This one comes up a lot. The fact that you said you wanted to set up a “realistic budget” suggests that you’re thinking about this in the right way. One reason that budgets get busted is that the budgeters make heroic assumptions about the amount and regularity of income and/or fail to acknowledge and plan for the fact that unforeseen expenditures are elements of reality that happen all the time. So you should not overestimate the amount of money that is likely to come in or underestimate the amount that is likely to go out.
 
Other than that, just be realistic about what you need versus what you want. Set up a budget that places priority on the necessities of life and only then makes money available for comforts and luxuries. Also, remember that growing old and making less money are facts of life, too, so try to factor in a healthy amount for savings and investment each month or at least for those months when reality doesn’t hit so hard and you have more money at the end of them than you were expecting.
-Conrad de Aenlle



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