The key to budgeting is figuring out how to prioritize. The best way to decide where your money should go is to create a monthly budget. First, calculate how much money you have coming in. Next, identify your needs: What areas require funds (i.e., car insurance and utility bills)? Tally those up and subtract the total from your monthly income. You’ll probably want to save a percentage of your income, so deduct that amount as well. After that, you’ll know how much money you have left over for discretionary spending.
The time value of money.