A budget is a plan that shows how much money comes in (income) and how much money goes out (expenses). We use a budget to make sure we have enough money to buy the things we need and really want. A budget also helps us set aside money for things that we can’t afford to buy right now. The money we set aside is called savings.
You will learn the different parts of a budget. You will also create a budget you could use to reach a savings goal.
Read the story Tim’s Turn to Learn and answer the questions on the worksheet. When you are finished, you will discuss the worksheet answers with your class.
Tim and Money Mouse reduced their spending in order to save money for the future. Another way they could have saved more money is by increasing their income. Read the story Heather Learns About Earning to find out how Heather increased her income.
Then, answer these questions about the story:
- What was Heather’s problem?
- How did she earn the money she needed?
- What else might Heather have done to earn the money she needed?
Now that you know what income and expenses are, can you find the income and expenses in this budget?
A budget helps us keep track of our money so that we can use it on things we really need and want. A budget also helps us save for things that we can’t afford to buy right now. A balanced budget has money in (income) equal to money out (spending and saving).
Now it is your turn to create a budget!: www.econedlink.org/interactives/EconEdLink-interactive-tool-player.php?filename=em483_budget2.swf&lid=483
- Read the story, Alexander Who Used to Be Rich Last Sunday. Discuss with your class what happened to Alexander’s money. Also discuss how you can keep from buying things that you don't need.
- Think of something special that you would like to save money for. Use the “Spending Tale” to keep a personal spending diary. Then create a budget that will help you reach your savings goals.