Learning Objective What Is Budgeting?
Key Terms What Is Budgeting?
Budgeting
What regular bills does a house- hold need to budget for?
To create a budget:
Remember that a budget is a plan. Your actual income, savings,
Preparing a Budget
Needs can be estimated based on bills, etc.,
Why might your spending not be exactly as planned?
Estimate Income
Estimate Expenses
Are these realistic figures for you?
Expenses
Variable expenses change depending on a number of factors as described below.
Examples of variable expenses are:
Plan Savings
Explain whether you would rather reduce spending on lunches or on entertainment.
Balance the Budget
Preparing a Budget Analysis
FIGURE 3.2.2 Personal Budget Variances for a Month
It is not calculated by using the previous allowance (+25%) and other (−25%) variances, as these would cancel each other out.
However, if the expenses figure is calculated and the result is a positive
How would a budget help you to be more financially responsible?
Which of the following is NOT relevant when planning a budget?
Which of the following approaches should NOT be used when creating a budget?
If your savings plus your expenses exceed your income, you can spend more money on variable expenses.
Which of the following is NOT an example of a variable expense?
A financial plan guarantees you cannot overspend.