What is a budget?
Understand how a budget can help you during the course.
Leticia Rosa avatar
Written by Leticia Rosa
Updated over a week ago

A budget is a way to assess how much you can spend every week or month to maintain your current lifestyle with the money that you have or earn. A financial plan looks many years ahead, and it tells you whether you should adjust your spending (in your budget) to reach the goals you have set for your future.

The financial plan is a reference you will be using throughout the year to see if you're not going over budget or if you have the freedom to move things around if needed. The budget will help you if an emergency situation occurs.

Your usual expenses will repeat throughout the year. For example, bills and rent payments, but sometimes it will not be the same amount (think groceries or medical bills). A budget illustrates where the money is going each week.

Based on that, the financial plan is a forecast for the long term, informing you how to adjust your budget to reach your goals.

For example, every month, you earn 100 and spend 85 (this is the budget). In one year, you'll have saved 180. If you put that into a savings account with a 5% interest rate, you'll have 189. Is that enough for the goals the student have set for themselves, i.e. studying for seven months and job searching for five months or more? Depends on the person.

That's why it is so important to plan and understand your own financial situation so that nothing prevents you from studying at Microverse for the whole duration of the Program.

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