Student’s Name
Institutional Affiliation
“Where Does My Money Go?”
The problem that I encountered in doing my assignment was that the actual expenditure was not based on income, instead, it is based on the amount spent on a daily basis. Additionally, the actual schedule did not show the expected budget since it acted as a regulating or controlling tool. The budget did not have a ceiling on expenditure; it only showed the amount spent on the actual categories of spent. As a result, the makes classification of accounts was difficult and slow. Since each day was unique, it was difficult hard to determine the categories of the activities that should be included. Moreover, recording all the information on a daily basis posed a real challenge. In fact, I normally forget to record some of the expenditures since I had to recall each entry. Due to the challenge of compiling an up to date list of entries, a person must always record his/her incomes or expenditures whenever they occur.
Compiling and accurate record of financial entries was very difficult. Despite my best efforts to record all the entries correctly, I was unable to have an accurate compilation of all transaction. For example, I could not remember what I spent on 2nd February and other missing days as shown in the schedule. Besides, the frequency of recording the information depended on my ability to remember the information on expenses. On the overall, I managed to record the information on a daily basis, except for a just a few days.
The choice of the commodities that I purchase is based on my income and the value that I get from these commodities. In general, a consumer makes purchasing decisions based on the utility he/she gets from the item. When discussing consumer theory, Batra & Kazmi (2008) opine that a consumer is rational and spends his/ her income on commodities that give him/ her the highest utility.  Since my actual income is $1570.19,  I have to spend an amount which is less than or equal to it. Otherwise, I will have to acquire the commodity on credit (Batra, & Kazmi, 2008).Normally, I spend my income on food, gifts and snacks and other essential expenditures that include rent, car payment, utilities, and clothing. Generally, I only pay for costs such as rent, utilities, car insurance among others on a monthly basis. Other expenditures such as food and snacks are spent on a daily basis.
I was not surprised by my spending habits since most of my expenses were on luxurious drinks, snacks, essential items, and gifts. I also paid my utilities, insurance, and rent expenses. The clothing and grocery took a big chunk of my income. I spent $301.1 and 358.12 on two items respectively. I have resolved to change my spending behavior since my income is not sufficient to maintain this expenditure. The summary of how I spent my money in the month of February is a shown in appendix 1.
In general, I can only maintain my current lifestyle by doing part time jobs. Alternatively, I can lower the quality of my lifestyle by reducing my expenses. If I were to adopt the latter option, I would have to reduce the amount I spend on clothing and grocery by almost 30%. In addition, I would have to forego various luxuries such as expensive gifts (Larson, 2010). In order to successfully initiate the budget process, I will first write a list of items that I want and also rank them depending on their level of importance. Those that are less important will be struck off so as to increase my savings.
Batra, S. K., & Kazmi, S. H. H. (2008). Consumer behaviour: Text and cases. New Delhi: Excel Books.
Larson, J. S. (2010). Do I need it? Or do I want it?: Making budget choices. Minneapolis, MN: Lerner Publications Co.
Appendix 1
Table 1
Income and Expenditures for the Month of February

               Income type

               Actual income

Examples: full-time job, dog walking gig, rental property, etc.  
Full-time job $1570.19 (worked fewer hours due to birthday vacation)



               Expense category

               Actual expenses

                   Fixed costs

                        Life’s necessities. Costs that remain static month-to-month

Rent/mortgage $363
Renter’s/home insurance  
Car payments $280
Car insurance $100
Cell phone bill $65
Medical insurance (health, dental, disability, etc.)  
Child and/or parent care  
Child support  
Student loan payment  
Credit card payment $0
Retirement savings  
Other savings goals (holiday shopping, vacation, etc.)  
Emergency fund contribution $0- Additional expenses this month

                   Variable costs

                        These costs are also usually necessities but tend to have a greater price range from month-to-month

Utilities $84.04
Groceries $301.27
Gas/oil $75.01

                   Discretionary costs

                        These are the costs you have the most control over and tend to have the greatest variation in price

Dining $80.32
Household supplies  
Home repair  
Car repair  
Legal fees  
Toiletries Bought w/ groceries
Hair care Bought w/ groceries
Pet supplies  
Clothing $358.12 ( Vacation)
Gym membership  
Charity offerings  
Continuing education  



                        The difference between income and budget: