Key to success
Income
Saving
Spending
Investing
Donating
Spending
plan
Resources
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Spending
After savings, the next step in
creating a spending plan is to consider your
spending habits. Once you’ve set aside money to save, you’ll have
a certain amount of income left. This is the money you can spend.
When planning your spending, you must make choices. You have a certain amount
of money to work with. How will you divide it up? When making spending choices,
it helps to know the difference between needs and wants. You
should make sure your spending covers a balance of both.
“Needs” are items that you truly must
have. These are things you
can’t get along without. For instance, we all need a place to live and
food to eat. We need water and clothing. We may not want to spend our
money on these things, but they’re important. We have to make sure they’re
covered first.
"Wants” are items that you would like to
have.You could
do without these items if you had to. For instance, you might want a new shirt
or a certain CD. You might want to go to the movies or to buy a cool video game.
You don’t really need these things like you need food and shelter.
You just feel that they’re important because they appeal to you in some
way. |
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