1. What Affects Income
Do you ever feel that you never have enough money for everything? Maintaining and improving your financial health is a relatively simple matter. You have only two financial tips to follow – Spend Less or Make More. Sound easy? No, each of these rational beliefs is very difficult to achieve. And of course your financial situation improves more rapidly if you can achieve both at the same time.
Regardless of your present financial situation, most experts agree that you’re not likely to enjoy financial health without a written plan. A spending and saving plan, or budget, summarizes future income. It’s your financial road map. It helps you know exactly how much money you have coming in, where you spend it, where you might be able to save a few dollars, and most importantly, what your financial future will look like.
To make a spending and saving plan, often called a budget, you will need to:
- Identify your income.
- List your expenses. (We’ll discuss this and the next three items in the section on Money Management.)
- Compare income and expenses.
- Set priorities and make changes.
- Create a budget.
In this unit, we will concentrate on income.