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How to Budget: Identifying your 'Real' Needs

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ExplorerHop.com  How to Budget. Real Needs

It was now time for Jonah and Edna to sit down and write out what their real needs were. 

ExplorerHop.com How to Budget. HouseExplorerHop.com  How to budget. FoodThese ‘real’ needs are expenses you cannot live without and are also called ‘must haves’ or ‘necessities’. For adults, this includes things like the rent or mortgage payments, electricity and water (adults call this Hydro), food and the phone bill. For Mira and Teyus, must haves include bike grease for Luctus, batteries for the Anulap and oil for the multi-purpose knife.

Jonah and Edna wrote down their ‘must have’ list:

ExplorerHop.com  How to Budget. Must Have list

 

Edna realized that just to survive she needed 10 coins. When she saw how she had foolishly spent more than that on a scarf she didn’t need, she was indeed very sad.

ExplorerHop.com  How to Budget. Money for Investing

Jonah then told her about putting money away to invest as well. Jonah and Edna both wanted to buy a house so they decided to put a little money away every time they were paid. Jonah thought if they could put away 6 coins every month, then eventually that would add up and be enough to buy a house. So, to their list they added:

ExplorerHop.com  How to budget.  Investment also 

ExplorerHop.com  How to Budget.  Money to have fun

Finally, Jonah pointed out that they still need to have a little bit of fun.  After all, there is no point in working hard and not enjoying life. So, he and Edna decided that they should spend 4 coins every month for fun stuff. Things they don’t need but which makes them very happy. 

Edna was very pleased with that, because she had paid 2 coins for a slice of cake which made her happy. With this budget she could get 2 slices of cake (2 coins + 2 coins = 4 coins). That is one for her, and one for Jonah.

Their final budget looked like this:

ExplorerHop.com How to budget. have fun also

ExplorerHop.com  How to Budget.  Edna and Jonah happyThis way, they had money reserved for things they absolutely needed, money saved for their house and money for fun. 

Jonah and Edna were both happy about this budget, as it helped them to spend their money more wisely now.

Grandma asked the travellers to make a budget for themselves. Here is what they put together:

 ExplorerHop.com How to Budget.  Mira and Teyus budget

Continue to The Final Tips >>

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