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Creating a simple plan to track money coming in and money going out.
Have you ever received birthday money and watched it disappear faster than a melting ice cream cone? What if you had a secret map that told your money exactly where to go so you never ran out?
A budget is simply a plan for your money. Think of it like a recipe for a cake. If you don't follow the recipe, you might run out of flour before the cake is done! In the world of money, a budget helps you see how much you have and how much you can spend. It keeps you from having 'empty pockets' when you really want that new book or toy. By making a plan, you become the boss of your money instead of wondering where it all went.
Quick Check
In your own words, what is a budget?
Answer
A budget is a plan for how to use your money.
To make a budget, you need to know two big words: Income and Expenses. Income is money that 'comes in' to your pocket. This could be from an allowance, doing chores, or birthday gifts. Expenses are money that 'goes out' or is spent. When you buy a candy bar, a movie ticket, or a gift for a friend, that is an expense. A budget tracks both so you can see the balance.
A good budget follows a simple rule: your Income should be more than (or equal to) your Expenses. If you want to buy something, you subtract the cost from your total money. The money left over is called your savings.
You have 6 and a snack that costs 6 + 3 = 910 - 9 = 11 left over, so yes, you can afford it!
Quick Check
If your income is 5 on a toy, how much money do you have left?
Answer
$3
Sometimes, we want something that costs more than the money we have right now. This is where Saving comes in. Saving is when you choose not to spend your money now so you can buy something bigger later. By tracking your budget every week, you can see how your 'Left Over' money grows into a big pile!
You want a robot toy that costs 5 every week in allowance. If you spend 5 2. Weekly Expense: 5 - 2 = 315 5. Calculation: weeks.
What is 'Income'?
If your income is 12, what is true?
A budget is a plan that helps you decide how to spend and save.
Review Tomorrow
In 24 hours, try to remember the two parts of a budget: money coming in (Income) and money going out (Expenses).
Practice Activity
Try this on your own: Create a 'Mini-Budget' on a piece of paper. Draw a line down the middle. Label one side 'Money In' and the other 'Money Out' and track your money for three days!