Having A Budget

Activity

Having A Budget

An eff ective strategy often used to help individuals make smart INFORMATIONThis is a Ready-Ed Publications' consumer choices is personal budgeting. A budget is a plan for spending and saving money over a period of time. It consists of two parts – income and expenditure. Income is money that comes into your budget from sources such as work. Some young people also book preview. receive an allowance or pocket-money from their parents or guardians. Expenditure is money going out from your budget. In other words, it is the money that you spend. By subtracting the total expenditure from the total income, the balance of a budget can be calculated. Wise consumers will try and make sure that their expenditure is less than their income so that they have money left over to save. People who are able to save money over a period of time are often able to satisfy more of their wants and buy more expensive goods and services in the future. Below is an example of one student’s personal budget for a period of one week.

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INCOME

Pocket money/allowance $10.00 Job – walking the neighbour’s dogs $10.00 Total Income $20.00

EXPENDITURE

Purchase lunch from school canteen twice a week $7.00

Bus fare to and from school $9.00 Total Expenditure $16.00

Balance = Total Income – Total Expenditure = $4.00

1.

2.

How much money was the student able to save during the week? ___________________ If the student was able to save that same amount of money every week, how much could he/she potentially save over the periods of a month and a year and what could they buy with their savings? Record your answers below.

Total savings What could they buy?

After 1 month

After 1 year

3.

Explain what a wise consumer will attempt to do when planning a budget.