1.4.6 Summary of key messages

• A budget is a comparison of income and expenses. It's an organized way to manage your money.
• If you have more income than expenses at the end of the month, you have a surplus. The best things to do with a surplus are to repay debt (especially high-interest debt, like credit card debt) and increase your savings.
• If you have more expenses than income, you have a deficit. You need to find ways to reduce your spending or increase your income.
• An envelope system can be used to manage monthly spending as an alternative to a paper budget.
• In an envelope system, you allocate money for different categories and then limit yourself to those amounts for the month.
• Revisit your budgeting system at least monthly to keep it up to date and realistic. Compare your actual spending with your estimated spending, and adjust your budget as needed.

At the end of the module, you will find an Action plan. This is a tool that you can use to track your progress and take the next steps to manage your income and expenses successfully in the future. Use the action plan as a roadmap for financial action!