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Rock Street, San Francisco

The first thing to go into a budget is all living expenses and necessary expenses, such as housing and food. With this graph, the couple notice that the biggest portion of their income goes towards rent. Housing tends to be the biggest expense for most people and will usually take a big chunk of change from the budget. It is always important to live within one’s means because of this. It’s a bit ridiculous to live in a large home that is more than fifty percent of total income. Those kinds of payments are unsustainable and won’t allow much room for other creature comforts, such as the internet, which some critics could even argue is a necessity with the way technology is in every part of daily life these days. The expense for that is also displayed in the pie chart above. Also, there are portions of the budget that are set aside for specific daily things like groceries and entertainment. Setting aside a portion of income for entertainment purposes (labeled personal) such as going out for dinner and movies or gym memberships, is vital because these things will happen and most people, if they can, will always have a little extra expense in these fields. These are not immediate one-time costs, but a good way to keep track and get an average is to keep receipts for about a month every time these items are bought and figure out an average over time or just use that month’s income spent as the standard. The same goes for gas and oil. Vehicles will always need to be maintained, and it is good to set aside a portion of the budget for such occasions.
In this budget, the couple has set aside a portion of their income into a savings. Many financial gurus state the importance of having an emergency fund. These are unexpected expenses that tend to happen but one can never tell what it is. It’s best to set aside an emergency fund and slowly add to it each month and base the entertainment spending allowance on what is left available after the savings has been established. This way, there is a constant flow into the savings, be it an account, a jar in the closet or a shoebox under the bed, and the couple will be prepared for any disastrous events such as a car crash and the car needs to be replaced. When creating a savings/emergency fund, it is most often said to accumulate enough in the savings to survive off the money saved for three to six months. This is an emergency fund, but events like Christmas and birthday presents are not emergencies. They come every year. Prepare for those occasions by placing that money in the personal section of the budget every month. The savings is just in case someone loses a job, or one becomes ill and needs special care.
Creating a visual for a budget is a great way to notice where all the money is being spent and to discover where costs can be cut. If the math is done, one will notice that the percentages may be a little off and add up to one hundred and one percent. With this specific budget, that is fine because the numbers are rounded up to the nearest whole number. When it comes to budgets, it is always best to overestimate expenses than underestimate. Hopefully, creating simple budgets and charts such as this one will save many people the headaches of finances and help things run more smoothly so they are more able to focus on other important aspects of daily life, such as who will fold the laundry this week.

Hi Amber—you have some good comments in this report. You forgot to include a second visual aid such as a line or bar chart, and I recommend breaking up your large block of text into smaller paragraphs with spacing in between to

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