Which of the following is NOT a recommended step in creating a budget?

Ignoring fixed and variable expenses is not a recommended step in creating a budget because a comprehensive budget is built upon a clear understanding of all income and expenses. Identifying fixed expenses, such as rent or mortgage payments, and variable expenses, such as groceries or entertainment, is crucial for accurately assessing financial health.

Without this important step, individuals may overlook significant financial obligations, leading to budget shortfalls or unexpected debt. In contrast, the process of listing income sources, setting realistic financial goals, and tracking spending habits forms the foundation of effective budgeting. It ensures that individuals can accurately allocate their resources, plan for future expenses, and work towards achieving their financial objectives. Each of these steps contributes to a comprehensive understanding of one’s financial situation, which is essential for creating a successful and sustainable budget.