Chapter 3 Budgeting: Using Your Money Wisely 55 Copyright Goodheart-Willcox Co., Inc. May not be reproduced or posted to a publicly accessible website. • List the estimated fixed and variable expenses for the time period and total them. These estimates will be based on actual expenses you had last month. • Subtract the total expenses from the total income to find discretionary income. • If the discretionary income amount is a negative number, reduce expenses. There is no set format for a budget. The example in Figure 3-2 shows a budget for a typical teen. When you have completed your budget, you have taken a big step in planning for your future. By keeping track of your income and planning what you will spend, you will have some control over your finances. Carlos Acosta Budget For the Month of October, 20-- Estimated Income Pay from part-time job 368.42 Babysitting 15.00 Yard work for neighbors 45.00 Allowance 40.00 Gifts 25.00 Total Estimated Income 493.42 Estimated Expenses Fixed Savings 60.00 Charitable contribution 20.00 Bus fare to work 16.20 Total Fixed 96.20 Variable School lunches 65.00 School supplies/fees 18.00 Entertainment 40.00 Clothing 50.00 Eating out 45.00 Miscellaneous 40.00 Total Variable 258.00 Total Estimated Expenses 354.20 Estimated Discretionary Income $139.22 Goodheart-Willcox Publisher Figure 3-2 This example shows a sample budget for Carlos Acosta. How can discretionary income be used to help you meet your financial goals?