What is a budget?

 

You’ve earned some money of your own, and now it’s time to decide whether to spend it or save it! Should you save it all for the future, or should you spend it right away on a treat of your choice? Or maybe you should spend part of the money on something you really need before buying a treat, then hold on to the rest for another day… But how much should you spend and how much should you save? These are the questions that a budget can help you answer!

A budget is a plan for how to spend and save the money you earn. This plan includes lots of numbers—how much money you’re earning, the prices of the things you need to buy, and the amount of money you may have left over to save or spend.

By knowing how much money you have and the things you need to buy, you will know how much money to spend on the things you have to have, how much is left over for things you want, and how much to save. A budget also helps you make sure that you don’t spend more money than you really have! With a little planning ahead, understanding smart spending and saving can be easy and fun!

Now it’s your turn to create a budget! You will need a piece of poster board, markers, scissors, glue and some white construction paper. Start by writing down the total amount of money you have saved, earned or will soon be receiving. 

Next, make a list of the things you need and want. For example, do you buy your lunch at school? Are you saving up for a special book, toy or game? Draw pictures of these items—you may choose to write their names as well! Create your list on white construction paper.  

Now cut out the pictures and glue them to the poster board. Write the prices of the items next to the pictures. Add up the total cost. Do you have enough money to buy what you need and want? If you were planning on saving money, is there any left over? 

If not, it may be time to make some choices! Start with the things that are the most important to you. Circle these items and add up the total cost. You may want to add one price at a time so you’re sure to have enough money in the end. You may even want to plan ahead, thinking of how much money you’d like to have left to save! 

Now that you’ve finished, is there any money left? Maybe you can save some for a rainy day!