ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Gather your financial statements. These documents, such as bills, mortgage statements, and account statements, can help you see exactly where your money is going. Looking for charges you make regularly can help you determine your largest expenses.

Detailed explanation-2: -Identify recurring expenses first: When budgeting, always ensure to account for all monthly recurring expenditures before accounting for your variable expenses.

Detailed explanation-3: -Begin by listing your fixed expenses. These are regular monthly bills such as rent or mortgage, utilities and car payments. Next list your variable expenses-those that may change from month to month, such as groceries, gas and entertainment. This is an area where you might find opportunities to cut back.

Detailed explanation-4: -In order to decide how you should spend your money, consider how your expenses fall into the following two categories: needs and wants. Needs are items you cannot live without. These may include rent, groceries, and health insurance. Wants are items that are not necessary but may make life more pleasant.