Making a personal budget.
When you live on your own you understand that something should be done with your unlimited wants and limited resources. You should use your income as effectively as possible. Choices must be made concerning spending and saving. You never know whether you can afford another outing, or a disco, or a concert. Then you come to the conclusion that you must develop a useful personal budget. And if you want to do it you should keep track of your actual income and expenses for a month, and, of course, at first you have to clear out what should be recorded.
Money resources may include allowance, part-time jobs, babysitting, errands, interest on savings. You must list all sources of income. And it means that if somebody presented you with a sum of money on an account with a bank, so you can rely on interest on savings and allowance have to be included.
Then you should record how much you spend for food, entertainment, clothing, college supplies, personal care, transportation, and miscellaneous items. You wonder in which category you spend the most and the least. You think that you should decide what changes to make in the budget if you want to reduce your expenses.
You have to understand that there is some difference between fixed, optional and flexible expenses. Fixed expenses are set in advance and must be paid regularly (e.g. rent payments, tuition, higher purchase installments). Flexible expenses are necessary but change with circumstances (food, clothing, college supplies). Optional expenses vary and are not always necessary (entertainment, personal care).
Thus you can compare your income and expenses. And of course you understand if you want to live good expenses should not be higher than income.
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