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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.
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.
1) Net wage: how much money you are getting monthly - you need this because it’s the backbone of the
budget; everything revolves around it
2) Monthly spending: how much money you end up spending per month - you need to know how much you
spend because it will tell you if you are under or over the budget
3) Monthly balance: how much money is remaining - this is important because it tells you if your budget was
a success or failure; if you are under budget, this is how much money you have left
4) Monthly savings: how much money you will take from your net wage to keep for saving - this sets up the
budget because it leaves you with the exact amount you can spend
5) Cost of living: the amount of money it costs for your everyday living necessities, like housing, internet, gas,
etc. - this is most likely what most of your spending might go towards, so it is important to make smart
decisions with your expenses.
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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.
I made my choices on everyday items based on my salary. Since the starting salary was really high for the
particular occupation, I was able to spend without much concern. I didn’t pick anything too excessive, so I was
left with a good amount in the end.
Part V: Summary
6. Identify two lessons you learned by completing this salary-based budget.
I learned that budgeting is in fact a good way to manage your money. It makes everything a little easier, even
though it may take some time. I also learned that there are a lot of things that you have to consider in
monthly expenses that I didn’t know about.