Assessment : Financial Budgeting

In this module, you have created a realistic personal budget that includes costs for education, savings,
housing, transportation, food, and other items. You have considered the how and why of staying (or getting)
out of debt, building credit, and saving for short and long term expenses. For your assessment, please show
that you have considered carefully all these items.

Part I: Net Salary

1. Please explain what you see as some of the benefits and challenges of creating and sticking to a budget.
There are several benefits and challenges of creating and sticking to a budget. One benefit is that you will
have more money to spend on your “wants” per say. For instance, if you stick to your budget and spend your
money wisely than you will have more money to spend on clothes or a dinner out with your friends. On the
contrary, there could be many challenges. It could be hard to not overspend on items that you want. You
might just feel to pressure of buying a more expensive car, even though it is out of your budget.

2. Using the budget you created in the module as a guide, explain at least five items that should be part of a budget
and provide a brief explanation of why these items are important to include.
Using the budget I created, I know that the five items that should be included in a budget are Savings Income,
Costs of Living, Health, and Transportation. Income is essentially important because you need to know what
you are taking in each year as a whole. In addition, you should include savings for retirement and you monthly
savings because it is essential that you look at your long term expenses for the future. Lastly, costs of living,
health, and transportation are important because they show how much you spend on items in your everyday
life and how much you should spend or save.

Part II: Savings Strategy

3. Using the budget you created in the module as a guide, explain why someone would save every month for both
short term and long term expenses. State how much is reasonable every month to save according to your
personal budget.
It is important for someone to save every month for both short term and long term expenses. Short- term
goals are your more immediate expenses and long term goals arrde usually you future costs. It is important
that you save for you short term goals because they are the things you will need to spend money on within
weeks or months. Also, It is important that someone save for their long term expenses because they will take
years to reach and play a huge factor in your future.

Part III: Surplus or Deficit

4. In the end, does your budget end with a surplus or a deficit?
In the end, my budget ended with a surplus of about $568. I believe that this is a decent amount of money
that I could take in each month.

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 5. What decisions did you make about your budget that led to that final outcome?

NOTE: ​If your budget ended with a deficit (you were spending more than you were taking home each month),
this is not sustainable. You would need to redo your budget until your net income covers all of your monthly
expenses.

When making decisions about my budget, I based my decisions based solely upon what I thought would be a
reasonable amount of money to spend on certain items. I knew that I should not waste my money. For
instance, I knew that i did not need to buy my own apartment, when I could pay less and have roomates. The
decisions I made reflected upon the amount of money that I would be making each year.

Part V: Summary
6. Identify two lessons you learned by completing this salary-based budget.

By completing this salary- based budget, I learned that budgeting your money is a committed process. You
have to learn not to waste money or buy things that you don’t need. You have to make sure that you are
strictly managing your money which could be challenging. I also learned that long term expense costs are just
as important as short term costs. They require much more money to be put away, but it is worth it for the
sake of your future financial status.