Making a budget
Why make a budget?
A budget is a plan that helps you manage your money. It helps you figure out how much money you get, spend and save. Making a budget can help you balance your income with your savings and expenses. It guides your spending to help you reach your financial goals.
A budget is especially important if you:
· don't know where your money is going
· don't save regularly
· feel overwhelmed by your finances
· feel like you’re not in control of your finances
· want to make the most of your money
· are planning for a major purchase or a life event
Making a budget can help you:
· set spending limits
· find ways to pay down your debts
· reduce costs and save more
· live within your means
· reduce stress
· have more money for things that are important to you
· feel in control of your money
A. Match the following words to their definitions:
1. Manage a. Money
2. Figure out b. Money that is owed to someone else
3. Balance c. To pay part of an amount that you owe
4. Expenses d. To buy something
5. Financial e. the money someone has
6. Pay off f. Having too much to deal with
7. Overwhelmed g. To pay back money that you owe
8. Finances h. Relating to money and how it is managed
9. Purchase i. The money you use to buy something
10. Pay down j. To spend less than you get
11. Debts k. To understand or solve something
12. Means l. To be able to live on a certain amount of money
B. Answer the following questions:
1. What is a budget?
__________________________________________________________________________
2. Explain the term, “balance your income with your savings and expenses”.
__________________________________________________________________________
3. Do you have financial goals? What are they?
__________________________________________________________________________
4. If you don’t know where your money is going, you ___________________________
5. Where do debts come from?
__________________________________________________________________________
6. How can you feel overwhelmed by your finances?
__________________________________________________________________________
7. Explain the term, “to make the most of your money”.
__________________________________________________________________________
8. Give examples of “a major purchase” or “a life event”.
__________________________________________________________________________
9. What is the meaning of “to live within means”?
__________________________________________________________________________
10. How can making a budget help you reduce stress?
__________________________________________________________________________