 Okay, this is our wrap-up session on budgeting, and this is probably the one that's going to cause you the most grief. It'll cost more breakups between husbands and wives, more breakups between girlfriends and boyfriends. It has to deal with money. Anytime you talk about money, somebody's not going to be happy. So there's three pieces to the puzzle. The first piece is our budget, what we plan to spend. I have planned income from the two sets of people working, and then I have unplanned income. For example, if you have a credit card and you can get cash back on your credit card, that's an unplanned income. If somebody works overtime, that's unplanned income. If you make a withdrawal from savings for whatever reason, that's unplanned income. So basically we have planned income, and then we have unplanned income, which will give us our total planned and unplanned income. That's the total amount of resources that we have to deal with. And then we go into the planned expenses. And we have a, oh, and I've just listed a couple of these up here to try and get a feel for what we have. We've got an allowance. Everybody has to have some spending money in their pocket. Charitable contributions, clothes, if we need new clothes. Credit card payment each month, and then the doctor, the dentist, food, gasoline, insurance for the house, insurance for the car, insurance for medical and dental. If you want to do any investment, any mortgage, personal savings. But these are the things for which we plan to spend, excuse me, plan to spend our money. And I've left some blanks down here at the bottom. By the way, this seat's available also for other things that I may not have identified. But usually this is where the bulk of your expenses come from. So what I'm going to encourage you to do is to get the worksheet. And then you have to go through each month. If we go back up to the top, we'll see that I've identified the expenses by month. So you say to me, why is it important that we understand the expenses by month? There's something called cash flow, that in some months you will not spend all the money you bring in, because in other months you will be spending more than the amount of money you bring in. For example, your taxes are always due at the end of the year, that's a December expense. Typically your house insurance and your car insurance are due in June, unless you pay it on monthly, it's a one-time expense. So you have expenses that occur once a year that will affect your net income in any given month. So I'm going to encourage you to do just this piece to set it up. Now, the question becomes, how do you know what you've been spending? The best way to find this out is to go back and either A, look at your bank statements, or B, look at your checking book, your checkbook, and see what volumes you have identified within your checkbook as to where you are spending the money. So let's assume that now we've gone through piece one, and we have completed the planned income. Then we need to go to piece two, which will be the actual expenses. How did we actually measure the income? Did we get the income that we planned, let me get down here, did we actually get the income that we had planned, and did we actually get the unplanned income and did we actually do the expenses? But the third piece is the key to this whole budgeting exercise, and that's called the variance. And the worksheet is set up so that if you take the planned income and you subtract from it the actual income, the difference will get you whether you were plus or whether you were minus. Did you bring more planned income than you anticipated, or did you bring in less planned income? Because the key to budgeting is not the actual plan and it's not the actual expense, what you need to work upon is the variance. And you need to understand A, what caused the variance, and B, what you can do about it. There may be some things you can't do. For example, if you were in an accident and you had to pay a deductible you hadn't planned on, then you're going to have to allow for that also. So the key to all of the budgeting process is to know where your variance is. And the fourth tab that we put in this one for you is to allow you to do some online checking. Most people struggle maintaining a balance. So I've set the worksheet up so that you will have your initial balance starting out the beginning of the year and then you can either enter your credit which is money you have coming in or your debit which is money that you have coming out and it will automatically total for you at the end of the year. I put this into an Excel spreadsheet so that you have a date, you have a reference to the account, whoever it is, credits and debit so that at the end of the year you can come back and you can sort this and determine where your actual expenses were, where your actual incomes were. You can do subtotals on each of those so that you have a much better feel for where your money was spent and where your money came from, giving you your net result for the end of the year. So again, back to the budget. It's set up by month. With categories, feel free to add into the categories you need to add into the categories and then it will automatically total to you, total to the right and also total to the bottom. So you will notice by each line what your total was on income, for each line which your total was on an expense and then for each month what was your net? What was your planned income? Lest your planned out go and that will be your net. So you'll have it for both the budget side, the actual side and also for the variant side. So again, I'm going to encourage you to go out and to do this, to look at where your money's coming from, where's your money going and if you don't like where it's going maybe you want to make some changes to your budgeting process. So feel free to use it and I hope you find it useful in your life.