Hello readers: This month I am covering budgets. So what is a budget: It is the amount of money one has for a specific service or a product. Let us take this to a larger scale in order to create a financial security for a household and/or a business. A good budget is a must.

A budget may be a top down budget or a bottom up budget. A top down budget means one knows the anticipated income and anticipated expenses. With a bottom up budget one knows the expenses and anticipated income is un- known. Generally speaking most budgets take the top down approach.

For a good budget to be effective in meeting the goals of a household one has to know the spending history and going forward one builds on that for the future. A good budget going forward will alert the household if a spending is out of control in a specific area and to take any corrective action. This implies that one has to keep track of your income and expenses and compare them to the budget.

It is not a easy task but once one gets in the rhythm it helps in bringing financial stability to the household.

Generally speaking a budget is by month for a year. What should be in the budget is one’s ability to go down to the lowest level of expenses you want to track.

Here is a list of expense items that should be included in no order; bank charges, entertainment, insurance, internet, rent or mortgage payment, house repair and maintenance, groceries, personal grooming, travel, utilities like heating, electricity and water, property  taxes, auto expenses-insurance, repairs and maintenance, gasoline, car loan or lease, license and tolls. One of the expenses that may be overlooked are licence renewal or passport.

Last, but not the least, contingencies for anything unforeseen as medical and bills should be included. One can and should also incorporate savings into the process. With the passage of time and tracking, if one is over the budget on expenses, you could focus on reducing controllable expenses and if the expenses are lower than budget, treat yourself and the family or put the monies towards savings or mortgage.

A day to day example of a budget is that one has allocated, let’s say $10 per day to cover coffee etc. and you did not spend it. You could put into the kitty or accumulate it for an upcoming event.I encourage the readers to take this ex ercise to know where you are coming from and where you are going.

Rattan Gandhi is owner of Quick Refund Tax, 133 Sixth St. His opin-

ions stems from 15 years of experience. If you have questions, he can

be reached at 905-616-5253 or rattangandhi@gmail.com.