SECTION 5: Budgeting
If you are ever going to get on the path to successful money management and wealth-building, you must start saving money each and every month. The sad truth is that many Americans take a “head in the sand” approach to money management; they don’t even know if they are saving money or are spending more than they are making on a regular basis. Let’s examine some important terms that we need to understand the important formula below.
Calculate Your Savings
Savings = Disposable Income – Total Expenses
By now, you have realized that the key to building wealth is saving. Savings can be defined as the total money we have to spend each month (disposable income) minus everything we spend money on (total expenses).