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The Anatomy of a Budget

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The Anatomy of a Budget

The best way to learn budgeting is often by example. The budget below is for a young adult making $40,000 annually from his/her current job. Review this budget along with the tips for using this financial planning tool. Keep in mind the following goal: What is the right balance of spending and saving to live a realistic, quality day-to-day lifestyle as well as save money for future short- and long-term goals?

Things To Know

  • A budget helps you come out ahead financially.

As you go through this exercise, think of how you would allocate this income to your expenses and savings goals.


Creating a budget and sticking to it gives you the ability to come out ahead financially. By knowing what you spend money on and matching your expenses with your income, you’ll gain financial security and the emotional security of knowing that you can meet your financial obligations.