Personal Finance - achieve your financial goals | Vicky Nedelcheva | Skillshare

Personal Finance - achieve your financial goals

Vicky Nedelcheva, Accountant

Personal Finance - achieve your financial goals

Vicky Nedelcheva, Accountant

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22 Lessons (45m)
    • 1. Introduction

    • 2. Personal finance

    • 3. Areas of personal finance

    • 4. Net worth

    • 5. Net worth - example

    • 6. Housing expenses

    • 7. Utility expenses

    • 8. Credit cards

    • 9. Food expenses

    • 10. Clothing expenses

    • 11. Gift expenses

    • 12. Travel expenses

    • 13. Extra income - sell or rent out assets you do not use

    • 14. Extra income on internet

    • 15. Emergency fund

    • 16. Savings on retirement

    • 17. Health insurance

    • 18. EveryDollar - a free budgeting software

    • 19. Setting up some basic information - part 1

    • 20. Setting up some basic information - part 2

    • 21. Dashboard

    • 22. Budget analysis

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About This Class

Personal finance plays a significant role in the process of building financial freedom. Having the necessary personal finance literacy will help you to eliminate any financial uncertainty and build your bright financial future.
Some people struggle with understanding personal finance essentials because of a wide variety of terms. Therefore, I designed this simple and easy-to-follow course devoted to personal finance.

The first part of the course explains essential terms related to personal finance. They are necessary to build your basic financial literacy and manage your money the right way.

The second part of the course is more interesting. It gives suggestions on how you could increase your income and decrease your expense.

After the essential and interesting part comes the practical part. The third part shows you a free budgeting software which you could use to plan your finance and achieve your financial goals.

At the end of the course, you will be confident in the field of personal finance and you will be able to use real budgeting software.

Let's get start it!

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Vicky Nedelcheva



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1. Introduction: Personal finance plays a significant role in the process of building financial freedom. Having the necessary personal finance literacy will help you to eliminate any financial uncertainty and build your bright financial future. Some people struggle with understanding personal finance essentials because of the wide variety of terms. Therefore, I have designed this simple and easy to follow course devoted to personal finance. The first part of the course explains essential terms related to personal finance. These terms are necessary to build your basic financial literacy and your ability to manage your money the right way. The second part of the course is more interesting. It gives suggestions on how you could increase your income and decrease your expense. After the essential and interesting part comes the practical part. The third part shows you a free budgeting software which you could use to plan your finance and achieve your financial goals. At the end of the course, you will be confident in the field of personal finance and you will be able to use real budgeting software. 2. Personal finance: Personal finance is a subject that is important for life. But what do you imagine when you hear the term personal finance? Maybe you imagine the money that belongs to an individual or a family. If yes, you are not wrong. But this answer is not complete because it covers only a small part of the areas related to the term personal finance. Personal finance is related not only to money, but to their management and leading a secure and fulfilling life. Personal finance refers to how an individual earns, spins, saves, and invests money. And to be more precise, I would say that personal finance refers to how a person manages and allocates his money to answer his own needs and achieve his short-term or long-term goals. For example, if you want to travel next year to some particular destination, you have already said a short-term goal. What you need to do is to decide if your current monthly income is high enough and allocate your money the best way to achieve this short-term goal. To achieve this goal, you should either increase your income or decrease your expenses. If you think that your income is not high enough, you can look for another way to earn extra money. A lot of people sell devices that they don't use anymore or clothes that look good, but they don't want to wear anymore. If you can't find a way to increase your income, you can change your daily habits and reduce some of your current expenses. For example, you can prepare food at home instead of going to a restaurant. Some people save money for college for their children. If want to do that too, you have already a long-term goal. To achieve this goal, you should make a few main decisions. The first one is how much money you need to save. After that, you need to decide how many years you need to save money. Next, you should decide on which basis you will save money. You can choose between a monthly and annual basis. After these crucial decisions, you can calculate the amount you need to save. If the saving amount about college is too high, you should make the next step and find a way to increase your income or decrease your expenses. In a conclusion, we can say that personal finance is a process of setting goals and making decisions on what part of an individual's income should be spent, saved, and invested. 3. Areas of personal finance: The main areas of personal finance, our income, spending, saving and investing. Income is the money that an individual urns. Or we can define it as the cash inflow that an individual receives. This is the amount that an individual allocates between spending, saving, and investing. When an individual works, they receive a salary or wage. Sometimes they can receive a bonus. When an individual owns a saving account in a bank, they receive interest on their savings. When an individual has invested in stocks, they receive a part of the business profit in the form of dividends. And individual can also receive money from renting out properties to third parties. In this case, they receive income called rent. Spending is this amount of money that an individual pays for receiving anything that is consumable. Spending includes all expenses that an individual makes to meet their needs. Typical sources of spending our rent or mortgage, food? Yes. Electricity, water, telephone, internet, clothing, shoes, transport, credit card payments. Here we can also add protection such as life and health insurance. If an individual earns more than they spend, some part of this difference can be allocated to savings or investments. Typical forms of saving our physical cash and savings bank account. Savings can be used for meeting some short-term goals. But keeping too much money in the form of saving, however, is not a good idea since it earns little to no return. In most cases, investing refers to the purchase of stocks or real estate. Buying such assets, the individual hopes that in the future they will receive back more money than they initially invested. It sounds good, but you should know that investing is related to risk because some assets do not generate the return that is expected. 4. Net worth: An individual has assets and liabilities. Assets are all items in individual owns that have a monetary value. The most common individuals assets are checking and savings account balances. The market value of securities such as stocks or bonds. The market value of real property, the market value of an automobile. And notable items of value, such as artwork, furniture, or jewelry. Liabilities are all debts that an individual has to pay. The most common liabilities, our credit card balances, mortgages, student loans, and car loans. The difference between total individuals assets and total individuals liabilities is called an individual's net worth. And individuals net worth is a picture of their financial condition. It gives insight regarding how well an individual is accomplishing their long-term financial goals. Once an individual determines their net worth, they can figure out what items are holding them back. 5. Net worth - example: John leads a fancy life. He lives in a house with a market value of $320 thousand and drives a car with a market value of $22 thousand. John owns $5 thousand on investment accounts and $14 thousand emergency fund. He has won $1000 savings, one hundred seven hundred dollars checking, and $3,700 in his bank account. The total amount of John's assets is $367,400. John has to pay back a $334 thousand mortgage, $2400 credit card balance, $34 thousand bank loan, and twenty-six thousand dollar car loan. The total amount of John's liabilities is $396,400. Let's calculate Jones net worth by subtracting his liabilities from his assets. John's net worth is negative. He owes $25,400 more than he owns. We can conclude that John leads a fancy but not a secure life. Making analyze of John's assets and liabilities, we see that he has a negative net worth because of the decreased market value of his house and car. The market value of both assets is less than what Jon O's on both loans, it is unlikely that the market value of the car will be recovered. But if John has good luck, the market value of his home will recover and his financial position will improve. Many people have a negative net worth just like John. This means that their assets cover only a part of their debts. My advice is to avoid a negative net worth and not to spend more than you earn to protect yourself and your family from a negative net worth, you should know not only how to spend less than you earn, but how to manage and allocate your personal finance. 6. Housing expenses: One of the biggest expenses that an individual pays is the housing expense. This housing expense is either rent or mortgage. In case you do not own a house and pay a monthly rent, you can use some of the following creative ideas to downsize your housing expense. If you are a sociable type of person, single, and still live alone, you can get a roommate. So the monthly rent will be split between you and your roommate. If you have a relationship, but still live alone, you can suggest your partner lived together. Living together with your partner will definitely lead to cutting back costs as much as possible. If you really like the area you live in, but you can't afford the rent of your current department. You can look for a cheaper apartment in the same region. If the area you live in is too expensive for your pocket, you should find a cheaper one. Another smart idea is to give up a paid parking space. I am sure there is a free park space somewhere in your area. Maybe it will be a bit far from your apartment or house, but it is worth it. Walking between the free remote parking space and your home will have a positive effect on your body and health. If you make monthly mortgage payments instead of monthly rent payments, you are able to refinance to get a lower interest rate. In case you own a big house, you can rent out a part of your property and increase your income as you receive monthly rent. Use your creativity and find your own way to decrease your house expenses. 7. Utility expenses: You need power for all appliances you use at your home. And this costs money. You can't give up using appliances, but you can use them rationally and reduce your electricity costs. The first step is to research and compare all utility providers in your area. After that, choose the one that offers the lowest rates. Another good piece of advice is to run the dishwasher only when it is a full load. Don't use the dryer. So oft, You can just hanging up the laundry. A lot of people change to energy-efficient light bulbs. They are a bit expensive, but we'll save money in a long-term. If you're heating system uses oil, it is not efficient enough. A good idea is to switch to a heat pump. Some institutions offer a low-interest loan program to make such a switch. When it comes to saving water, you can reduce your water consumption by taking a shower instead of a bath. Another option is to take shorter showers or use a low-flow shower head. Sometimes the water bill is too high because of a water leak. That's why it is important to check all your faucets, shower heads, and pipes. If you find a water leak, you need to repair it in order to reduce your water cost. 8. Credit cards: There is nothing bad about using a credit card when you apply some good practices for reducing your credit card debts. Credit cards are a powerful financial tool of 21 century, but only if used responsibly. When you choose a credit card, you should compare different offers and choose the best one. She was a credit card with a low-interest rate. If you expect that you'll be late with your payments, you should look for a card with the lowest penalties. Even if you have a credit card with the lowest penalties, tried to pay off your debt on time. Another good practice is to consolidate your credit card debts. If you own two or more credit cards, you can borrow money from a financial institution and use it to pay off all of your credit cards at once. After that, you have to pay only one larger loan payment per month. This option is reasonable only if you succeed to negotiate alone with a lower interest rate compared to the some of the interest rates on all credit cards. 9. Food expenses: If you want to cut your food expenses, you should cook at home instead of eating out. By preparing a meal at home, you not only save plenty of money, but also you keep full control over what's in your meal. A good idea is to make a meal plan for the whole week. So you know which ingredients you need and you can create a grocery list. The grocery list helps you visit the grocery store once and by the right quantity. So you avoid food waste. Everybody who has a garden or a balcony can plant seasonal vegetables or hubs. It is a good way for reducing the amount you have to pay in the grocery store. Some other small tricks can help you to reduce the amount that you spend on food. For example, always when you have an opportunity, use discount codes, coupons, and loyalty cards. Shop only seasonal vegetables and fruits. They are much cheaper than out of season products that have to be imported. And last but not least, don't shop hungry and bring your own bags. 10. Clothing expenses: To spend money on clothes, you should know how to do it. It would be useful to be familiar with the economic law of supply and demand. It says that prices are based on demand. When demand is low, prices go down to, Consequently, when clothing is out of season, their demand is low and their prices are lower. This is the best time to grab the clothes you want at a reasonable price. I am sure that you have clothes and shoes that you do not want to. Where exactly these clothes can help you to decrease your clothing expense as you sell them and earn some extra money. If you are invited to a special occasion, please don't hurry up to buy luxury clothing. Instead, ask a friend for a favor and take something from their closet. Avoid flash sales that make you crazy. Sometimes you're so excited to buy some dress genes or shoes only because of a big price drop. And you believe it's more than a good deal. But please don't be blinded by the price and make reasonable clothing purchases. If you do not need the item, do not spend money on it. Learn to distinguish between needs and wants. Don't take shopping as a hobby and a way to improve your mood. Shopping is a hobby is a bad habit and it leads you to feel better for just a brief period. After this very short period, you realize that you don't need all the items you have bought. I do not say to stop shopping. Just do it wisely. 11. Gift expenses: Do you know that there are so many ways to save on gifts? Yes, it's true in many people all over the world use these small tricks to save money on gifts. Gift cards are increasingly popular as gifts because the recipient chooses alone what to buy. There is a wide range of websites that help you save money on the specific gift cards you're looking for. Such websites or gift cards, carpool, and raise. The most effective way to save money on holiday gifts is to shop throughout the year. So you can track product costs throughout the year and make a purchase when prices are at their lowest. I like the strategy where you leave your shopping cart unattended. You choose the items that you want to buy and leave them in your shopping cart. The marketing team of the online shop sees that you want to buy these items. But obviously, the prices are not reasonable for you. In most cases, the marketing team decreases the price of the items, expecting that you will make the purchase. Then you come back and buy the items. 12. Travel expenses: If you want to downsize your travel expenses, there are a few options to do that. The first one is to use your bike instead of your car. It is not only cheaper, but also good for your health and for the environment. If a bike is not an option for you and you want to travel by car, you can share the travel with two or three other colleagues. In this way, you split the travel expenses between your colleagues and you. Another option to save money on travel is to make a grocery list for the whole week and traveled to the store only once a week. 13. Extra income - sell or rent out assets you do not use: To improve your financial situation, you either decrease your expenses or increase your income. We have already talked about ways to cut expenses. In the following few videos, we will go through some ideas on how to increase your income. If you own a garage, park space, apartment, or some other property that you don't use it the moment you can earn money as you rent them out. You can also rent out your bike or your car. Some people own tons of items they do not want to use. In this case, the best option is just to sell them. There are many online platforms where you can sell such stuff. You can sell clothing on eBay and books on Amazon. Use jewelry can be sold on out of VR If you want to sell some vintage collectible and antique items, you can do it on Ruby On pre-owned wedding People sell used wedding dresses and accessories. You is a good place to sell your used electronics no matter if they are broken or not. 14. Extra income on internet: Internet offers countless opportunities to make money. Internet allows you to transform your skills and hobbies into a money source. It depends only on your skills and the time you can spend to make money online. In this video, I would like to share with you a few ideas. I find interesting. People who design beautiful and unique crafts can sell their products on Etsy. People who are experts in some areas and like teaching can create a blog or sell online courses on platforms such as skill share and Udemy. People who are good at marketing can make money by doing affiliate marketing. If you are of the people who like taking photos, you can sell some of them on different online platforms. Such platforms are big, CAN and dreams If you want to give your opinion on a website's design and user experience, become a website tester. You will help companies to improve their presence on internet and you can earn around $10 for every 20 minute test you complete. People who have a nice voice can provide their voice for professional audio work, such as games and commercials. Some companies want to know what consumers think about them and they pay survey sites to collect the data for them. These survey sites would pay you to share your opinion and fill out surveys online. More and more people invest in stocks and earn dividends. This occupation is a bit risky and you should improve your knowledge and skills in this area. Or you can look for advice from an expert. The idea is above are only a small part of the whole list of opportunities for making money online. Make research and find the option that suits your wants and needs. 15. Emergency fund: What would you do if you receive some unexpected bill? How would you act if you lose your job? Would you borrow money from a friend? Would you take a loan from a bank? I have a better solution. Just prepare yourself for the unexpected and unforeseen situations in life and create your emergency fund. The emergency fund is an amount of money put aside for unexpected events. Having an emergency fund, you can pre worry about some common future uncertainty. In this video, I would like to emphasize the importance of emergency funds. Having an emergency fund is a huge financial support. It provides you the peace of mind to know that you're going to survive financially when something unexpected happens. If the stability of your income is high, then you need to set up a relatively smaller emergency fund. But in case your income is insecure, your emergency fund should cover more months of spending. Some experts say that an individual should keep between 36 of their monthly expenses aside in an emergency fund and add extra $100 per child per month. Let's see the following example. This is John. Let's assume that John's monthly expenses are one hundred and five hundred dollars and he has one child. He makes a decision to set up his Emergency Fund. Firstly, he calculates that his emergency fund should be between 7500.15000. After that, John opens a checking account at a bank that comes with a debit card. He believes it is very convenient because he can get to his money easily and quickly. And now he should build a habit of making regular deposits into his account until he reached a reasonable amount. He decides to set up so that a specific amount goes to the emergency fund directly after each deposit. Even if you can't save an emergency fund that covers your expenses between 36 months, you should set aside some amount. Don't worry if you Emergency Fund is not as big as experts recommend at the end of the day, better a small emergency fund, then no fun at all. Or we can say better or poor horse than no horse at all. 16. Savings on retirement: Saving for retirement is a long-term strategy. To choose the wisest saving strategy, you need to become familiar with different retirement account options. Many for-profit companies offer their employees a 401K retirement plan. If your employer offers such a retirement plan and you want to contribute to it, you have to fill out a form and write what percentage of your paycheck you want to save for retirement. This type of retirement plan makes sense only if your employer matches your contribution. This means that your employer contributes a certain amount to your retirement savings plan based on the amount of your own annual contribution. The most common matching formula is one-to-one. If you contribute 5% of your annual income, your employer has to contribute 5% to. There are two basic types of 401K accounts, traditional 401K and Roth 401K. When you save in a traditional 401K account, you don't pay income taxes on the money you set aside. Logically, your contributions reduce your income taxes for the year they are made. But when you withdraw the amount saved, you have to pay a tax. When you save in a Roth 401K account, you pay income taxes on the money you set aside and when you withdraw the amount saved, you do not have to pay taxes. There is a maximum amount that can be contributed to a 401K plan. In 20202021, the amount contributed can't be higher than $19,500 per year for workers under age 50, $26 thousand for those age 50 and up. If you are self-employed or you work in a small company and your employer doesn't offer a 401K, you can save money in an individual retirement account. There are some main types of individual retirement accounts. We will go through two of them, Traditional Individual Retirement Account and Roth individual retirement account. When you save in a Traditional Individual Retirement Account, your contributions are tax deductible. However, when you withdraw the amount from your traditional IRA, this amount is taxable as ordinary income. Important point is how much of your traditional IRA savings you are able to deduct on your taxes. It depends on if you have a spouse and if you and your spouse have a retirement plan at work, if you and your spouse don't have retirement plans at work, then you can deduct your IRA contribution. If you or your spouse has a retirement plan at work, it is expected that your IRA contribution won't be tax-deductible. There is a contribution limit for traditional IRA in 20202021. This limit for people under 50 years is $6 thousand per year. For people who are 50 or older, the contribution limit is up to $7 thousand per year. You can't reduce taxes by making contributions to Roth IRA. But when you withdraw from Roth IRA, you have not paid taxes. However, there are income limits on who can contribute to a Roth IRA. In 20-20 single people with gross income below $139 thousand, married people with gross income below $206 thousand can contribute in a Roth IRA. They can contribute up to $6 thousand if they are under 50 years old and up to $7 thousand if they are older than 50 years. In 2021, single people with gross income below $140 thousand and married people with gross income below $208 thousand can contribute in a Roth IRA. They can contribute up to $6 thousand if they are under 50 years old and up to $7 thousand if they are older than 50 years. Estimate use situation and make decision to save money for retirement. After that, decide on the most appropriate for your retirement plan and start making contributions for retirement. This will give a finance stability for the years when you will be not able to work anymore. 17. Health insurance: In this video, I would like to mention some important points related to health savings accounts. If you want to have some financial security when it comes to future health care expenses, you need to open a health savings account. Used wisely, the health savings account could provide both your personal and financial life healthy. The health savings account build savings that can be used for covering medical expenses at anytime without taxes or penalties. So you have the stability to meet your health care expenses anytime. Opening a health care account is as important as opening a retirement account. The health savings account can be opened by your employer or by yourself through a bank or other financial institution. Logically, contributions in your health savings account can be made either by your employer or yourself. In both cases, you are the only one who owns the account and the money. To be eligible to open such an account, you must be under age 65 and own a high-deductible health insurance plan. Something more, you must own only this high deductible health plan. If you own some other health plan, you are not eligible for the health savings account. Let's suppose that you have enrolled in Medicare. In this case, you can't make contributions to a health savings account. Another essential point is that the money going into your health savings account is tax-free. And when you cover some health expenses from the account, you don't have to pay any taxes too. Some institutions pay interest on the unused amount in your health savings account, so your money increases over time. Another advantage is that the money left in the health savings account at the end of the year is available next year for future health expenses. Similar to retirement accounts, health savings accounts have also contribution limits. When we talk about individual health savings accounts, the limit in 2021 is about $3,600. And when we talk about a Family Health Savings Account, the limit in 2021 is about $7,200. Last but not least, I would like to mention another popular type of accounts designed to help people save for healthcare costs. It is called a flexible savings account. This type of accounts has two main differences compared to the healthcare savings account. The first one is that the flexible savings account does not depend on the type of health insurance plan that employee uses. And the second difference is that all contributed money in the account has to be used each year or else it will be lost. 18. EveryDollar - a free budgeting software: You can plan your personal finance using Excel or Google sheets. Personally, I believe that there are very good apps that save you time. In this video, I will talk about every dollar. Every dollar is budgeting software that shows all your money in one place. It helps you track your money and share your money goals. Based on these goals, the software will help you build a custom budget so you can crush them all. The program uses a zero-based system. According to this budgeting system, every dollar is assigned to a category. Every dollar is suitable for tracking expenses and savings. But if you want to track investments, you should find another software. Lets assume that Jon creates a free every dollar account. He should enter his name, email, and password. The software sends him a verification email, and when he confirms his account, he is ready to begin. When John signs in for the first time, he can enter some information related to his income, expenses, and savings in advance. Every dollar allows John to skip these steps and go directly to the dashboard. But John prefers to enter some information in advance. The software asks John what is important to him. He can choose between six options. Pay off debt, save for retirement, stopped living, pay to pay, pay for kids, college, save for a home, and travel. He chooses the last two goals. Save for a home and travel. After he has chosen his goals, he should provide some more information about his situation. This way, the software gets information on whether John has a family and owns assets such as a house or car and so on. 19. Setting up some basic information - part 1: The next step is related to income. Every dollar allows its users to enter their monthly paycheck. John supposes that his income next month will be the following. $2800 salary, $800 income from affiliate marketing, and $120 from renting out a garage. The software calculates that John's total income next month is expected to be $3,720. Now John should enter all his planned monthly expenses. The software suggests the most common housing expenses. He only needs to add the amounts. Of course, John can change the name of expenses and add more expenses. John plans the following housing expenses. $700, rent, $70, water, $80, gas, $60, electricity, and $50 trash. On the top of the desktop, we see that $2760 left after deducting John's total housing expenses from his total income. 20. Setting up some basic information - part 2: The next category of expenses that John needs to enter is related to the transport he uses. Let's say he plans to spend $200 on gas and $60 on car repairs. Food expenses are the next expenses John needs to enter. He expects to spend $400 dollar on groceries and $0 on restaurants. Every dollar suggests a wide variety of personal expenses. John plans the following personal expenses. $180 on clothing, twenty-four dollars on phone, $60 on haircut and cosmetics, and $14 on subscriptions. On the top we see 10000, $822 left after subtracting housing, transportation, and personal expenses. When a positive amount left on this step, the software and forms, the users that their monthly income covers their monthly basic expenses. The next category of expenses of the budget is called Giving. Here users enter amounts they give for charity or for a church. For example, John plans to make a donation of $120. This amount should be entered in this section. The last step is the debt category. To improve his financial health, John has to pay off all his debts. He expects that he will use his credit card and have to pay off $370. He has a car loan and will pay $250 on it. John's debts will steal $620 of his monthly income. John has $182 left. What he can make with this amount is to put it into savings. 21. Dashboard: After entering some information in advance, John comes to the budgeting page. This is the place where the magic happens. In the middle of the dashboard appears John's budget. When John looks at his budget, he sees well categorized budget items there planned amounts and they're real amounts. John has already inserted some initial information about his planned income and expenses. On the budgeting page, he can edit, add, and delete information. For example, he adds planned amount for health insurance, auto insurance, and emergency fund. Don't forget that the budget strategy here is that every dollar should be spent or saved. Therefore, John puts the left amount into categories, savings under the name savings for long-term goals. All Joan's money is allocated. On the top of the dashboard. The program says, it's an every dollar budget. John enters information related to his planned amounts before each month starts so he can hit his money goals. After the start of the current month, John needs to record all actual amounts that he earns, spends or saves in the current month for each money in and money out, a transaction should be created by the paid version. Users can sink there every dollar account with their bank account, and the software will automatically enter the transactions. John uses the free version of every dollar and he should manually add his monthly transactions. When he wants to add a new transaction, he clicks on transactions. The program opens a window that allows him to enter either expense or income. John needs to enter the real amount and choose a budget item. So the program allocates the money and John contract the amount correctly. After entering a transaction. John can see it on the right side of the desktop. He can edit or delete it. The amount of each transaction appears in the third column of the budget. When John inputs is paid debts, he can have a surplus or a deficit. In this case, he has a surplus of $610, which John puts into categories savings under the name savings for long-term goals. 22. Budget analysis: When John closes the transaction window, he sees on the right side three small subsections with the following names, planned, spent and remaining. By clicking on the plan subsection, you get a picture of all planned expenses and savings. By clicking on the spent subsection, you get information about all real expenses and savings. And the third subsection shows the difference between planned and actual amounts. So John has insight whether he goes over a budget or not. The remaining subsection shows that John's total actual expenses and savings are with $150 lower than those he has planned. To understand these $150 remaining. Lets see an analyze John's actual income, expenses, and savings compared to their planned amounts. By looking at the budget, we see that John's actual income is $3,570. He receives $150 lower-income than the planned one. Here is the answer why the budget shows $150 remaining. It is interesting to track John's actual expenses and savings and see which planned amounts have been overrated and which underrated. John spends $20 more for charity than he expected. His electricity and gas expenses are also a little bit higher than he planned, but the water expense is lower than planned. The actual car gas expense is also above the planned amount, but the actual car maintenance expenses lower. John spends on groceries less than expected, but he spends money on restaurant food. This oppose clothing expense is $180. John spends only $100 on clothes. On the other side, he spends more than planned on cosmetics, subscriptions and medicines. Let's go back to savings category. We see that John's actual savings for long-term goals are $610. This is the amount left after paying all Monthly debts and covering his emergency fund. If we suppose that the goal of John is to save $735 for a long-term goals. We can say that he has almost achieved his goal because the sum saved is a little lower than the planned one.