What should be prioritized first in your budget?

The priority in a budget should be given to fixed expenses. Fixed expenses are the costs that remain consistent month after month, such as rent or mortgage payments, utilities, insurance, and loan payments. These expenses are essential for maintaining basic living standards and protecting your financial wellbeing.

By ensuring that fixed expenses are covered first, it helps to create a solid financial foundation. This approach prevents late fees or potential loss of shelter or critical services, which can lead to further financial difficulties. Once fixed expenses are accounted for in the budget, you can then allocate funds to variable expenses and discretionary spending, which are more flexible and can be adjusted according to your current financial situation.

Overall, prioritizing fixed expenses sets a strong groundwork for effective money management and ensures that essential needs are taken care of before considering less critical areas of spending.