Ideally, that individual's yearly budget (for expenditures, i.e. spending) should be anything less than $60,000 per year.
For an ordinary person, a financial budget would be defined by the Oxford dictionary as "an estimate of income and expenditure for a set period of time." You have already provided the person's monthly income in your question, so we just need to convert that into yearly income.
($5000/month) x (12 months/year) = $60,000/year.
The next step is to make an estimate of the person's expenses for the year. Figure out what their needs are first -- that is, the essentials of living... housing, food, clothing, utilities, transportation, etc. Next, add taxes to that -- although taxes are not really a need, failure to pay the correct amount of taxes to the government could result in punitive action that would prevent the individual from maintaining their income (e.g. additional monetary penalties) or even living freely (e.g. tax evasion would likely result in a prison sentence and the evader losing whatever job they had at the time).
Total all those expenses up, and you've got a person's non-discretionary spending. Subtract the non-discretionary spending from income, and if the remaining amount left over is positive, that person now has options for what to do with that surplus money. They can save and/or spend any or all of that leftover amount. Any amount spent for an individual's additional wants (e.g. vacations, luxury items, donations to charity, or any other non-essential things) is considered discretionary spending. When you add a person's non-discretionary spending and discretionary spending together, the sum becomes that person's budget for expenditures.
Ideally we want the budget for expenditures to be less than the person's income, because that means the person would be able to save money, and saving money for the future is a good thing, as one never knows when they might need some extra cash fast. So based on your information of having an income of $5000/month, we want that person's annual budget for expenditures to be less than $60,000/year.
Ideally, that individual's yearly budget (for expenditures, i.e. spending) should be anything less than $60,000 per year.
For an ordinary person, a financial budget would be defined by the Oxford dictionary as "an estimate of income and expenditure for a set period of time." You have already provided the person's monthly income in your question, so we just need to convert that into yearly income.
($5000/month) x (12 months/year) = $60,000/year.
The next step is to make an estimate of the person's expenses for the year. Figure out what their needs are first -- that is, the essentials of living... housing, food, clothing, utilities, transportation, etc. Next, add taxes to that -- although taxes are not really a need, failure to pay the correct amount of taxes to the government could result in punitive action that would prevent the individual from maintaining their income (e.g. additional monetary penalties) or even living freely (e.g. tax evasion would likely result in a prison sentence and the evader losing whatever job they had at the time).
Total all those expenses up, and you've got a person's non-discretionary spending. Subtract the non-discretionary spending from income, and if the remaining amount left over is positive, that person now has options for what to do with that surplus money. They can save and/or spend any or all of that leftover amount. Any amount spent for an individual's additional wants (e.g. vacations, luxury items, donations to charity, or any other non-essential things) is considered discretionary spending. When you add a person's non-discretionary spending and discretionary spending together, the sum becomes that person's budget for expenditures.
Ideally we want the budget for expenditures to be less than the person's income, because that means the person would be able to save money, and saving money for the future is a good thing, as one never knows when they might need some extra cash fast. So based on your information of having an income of $5000/month, we want that person's annual budget for expenditures to be less than $60,000/year.
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