Chandra wants to develop a personal budget. What is the first step she should take?

When developing a personal budget, establishing goals is a crucial first step because it sets a clear direction for the budgeting process. By determining what she wants to achieve with her budget—such as saving for a vacation, paying off debt, or building an emergency fund—Chandra can create a financial plan that aligns with her aspirations. Establishing these goals helps prioritize her financial decisions and gives her motivation to stick to her budget.

After identifying her goals, the subsequent steps would likely include calculating her income and identifying her monthly expenses, all of which inform how she can allocate her funds to meet those goals. Monitoring her spending is also important but comes after the budget has been set. By focusing first on her objectives, Chandra can make informed choices that reflect her priorities and financial aspirations. This foundational step enhances the effectiveness of her overall budgeting strategy.