• a clear and numerical translation of the personal economic situation
• a detailed analysis of the costs to be incurred
• a forecast of future expenses
• a constant monitoring of costs that will allow the reduction of accounting risks and will facilitate the gradual reach of the financial goals set (buy a house, a car, to run a business).

It is important to draw up a sustainable personal budget, only in this way will it be possible to achieve financial health which, in turn, will produce well-being and contribute to serenity.  

In fact, if the established budget is too rigid, it will be difficult to put it into practice for a long term. On the contrary, if it is too flexible, it will not produce the desired final results.

Basic elements of a budget 

Here you have a list of the main elements of a budget and their definition.

• FIXED EXPENSES are all the expenses that stay the same from month to month. An example of fixed expense is the rent.
• VARIABLE EXPENSES are the expenses that may change from month to month, for example: groceries, gas and entertainment
• TOTAL EXPENSES are constituted by the sum of your fixed and flexible expenses
• TOTAL MONTHLY INCOME is the income from your job or other resources including investment dividends, pensions, Social Security benefits, rental income and more.
• DISPOSABLE INCOME is the money remaining after you subtract your income taxes from your income