1. The budgeting process consists of figuring out how much needs to be alloted from one's monthly income to various expenses. How much is alloted is a function of what kind of lifestyle one aspires to acheive, as well as ones monthly income. An example of a monthly budget is as follows: $400 for groceries, $200 for dinining out, $100 for mortgage or rent, $300 for utilitites, $200 for house mainenance, $300 for a car payment, $250 for gas and oil, $50 for car maintenance, $150 for car insurance, $150 for new clothing, $100 for work and leisure clothing, $250 for medical insurance, $50 for medicine, $100 for dental and eye care, $100 for personal allowance, $800 for day care, $100 for enertaintment, $200 for vactions and recreation, $50 for book clubs and magazines, $2500 for taxes of all sorts, $50 for life inusurance, $200 for gifts and charities, $100 for toilletries, $50 in dues, and finally $50 for various other expenses. All of this adds up to a total of $10,290 per month.
             In order to "trim some fat" off of such a budget, I would cut down on personal entertainment costs. If needed, all of the debts could be consolodated, and if there are extra uneccesary vehicles, I would sell those too. Anything that could be refinanced into a better rate obviously should be, and I would look for cheaper insurance policies. As far as food and clothing goes, cheaper products could be bought, and if worse came to worse I would stop eating out.
             2. Emergency savings are a must, and the reason for this is that if one becomes sick or injured and can't work for an extended period of time, they need to have enough saved up to live off of until disabilitiy insurance activates and starts sending checks. How much needs to be saved depends on how long it is before the disability insurance starts its convering, whether that is for 1, 3, 6, or 12 months.
             3. There are 6 major types of insurance: health, disability, liability, life, automobil...