From the course: Finance Foundations
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The importance of personal budgeting
From the course: Finance Foundations
The importance of personal budgeting
- Okay, let's talk about a prudent lifestyle. The most prudent thing you can do when it comes to financial flexibility is to keep your fixed costs low. Your fixed costs are exactly that. They are fixed. If you buy a big house and get a big house payment, you're going to have that big house payment for a very long time. It is with you relentless every month. A big car payment is the same thing. These are lifestyle choices that constrain your financial flexibility. House payments, car payments, installment payments, cable, internet, phone bills: all of these fixed cost things add up. The more of your income that is pledged to meeting these monthly fixed costs, the less financial flexibility that you have, less financial flexibility to quit one job and take another with lower initial salary but higher potential upside, less financial flexibility to go back to school, less financial flexibility to take the job that you want rather than the job that you need so that you can make all of…
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