BudgetMath.com F.A.Q.

This is extra money that's left over, AFTER all expenses have been paid. Many people don't realize what their discretionary income actually is, and end up overspending, causing them to not be able to save any money. Once a discretionary income figure is realized, it should not be overspent, if saving money is a goal.

To find out what your discretionary income is, you can create a budget using our website. Click here to create a budget.

This should be at least 15% Income / 85% Expenses

This way, for every $10,000 you make, you'll have an extra $1,500 of money that can either be saved or to be used at your discretion. You'll be able to do more recreational activities like going out to the movies or taking vacations. A higher expense ratio makes it much harder to save money, and your spending habits should be modified.

The simple answer is that knowledge is power.

If you don't have a solid understanding of your personal financial situation, you're liable to be spending too much money in general. This might lead to buying a home or a car when you're not in a position to. Or you could be going on through life without saving any money along the way. Having something like that happen is not an easy thing to get through.

By creating a budget, you will gain a new perspective on your finances. This allows you to prevent yourself from making bad financial decisions, and in turn start saving more money.

Yes! When you're filling out the budget form, make sure that: 1) The total income entered is a COMBINED total (after taxes). And 2) Every single expense is entered into the budget.