Budgeting
NZC Level 5
Personal Financial Affairs
ACC 12/1/3
Discuss these questions
with your neighbour – how
Budgeting many can you answer?
Can you come up with any
further questions of your
What is a budget? own?
Be ready to share your
Why prepare a budget? ideas
What goes into a budget?
What does a budget look like?
What does a budget tell us?
How can we use a budget?
estimated
plan
What is a future
budget?
income
spending
To live within
To help financial
achieve a means
savings goal
Why
prepare a
budget?
To keep
“on track” To be aware of
financially financial
responsibilities
Estimated
income
What goes
into a
budget?
Estimated
spending
Title – individual,
time period
Estimated
What does income
a budget
look like? Less: estimated
spending
Surplus / deficit
What does
a budget
tell us?
Identify surplus
or deficit for the
time period
How can
Assess any action we use a
that may need to budget?
take place
Eg. Look for
expenses to
decrease or income
to increase Arrange finance
if necessary
Summary
A budget is a plan for estimated
future income and spending. It is
useful in helping achieve financial
goals, eg. Saving for a holiday.
Format for a Budget
Sam’s Monthly Budget
Income
XXX
XXX
XXX
Spending
XXX
XXX
XXX
Surplus / Deficit for the month XXX
Mike has just finished year 11 and wants to buy his first
car. His parents have suggested he prepare a weekly
budget to help him identify how much he can save.
•His part time job earns him $80 per week and his
parents give him $25 per week pocket money.
•He has to pay for all his clothing and entertainment
which he estimates is $20 and $15 respectively per
week. Mike has a weekly magazine subscription of $5
and bus fares of $12 on average per week. He knows
he spends a bit on snacks too which he estimates to be
$10 per week.
Prepare a weekly budget for Mike.
Mike’s Weekly Budget
Income
Wages 80
Pocket money 25
Total Income 105
Less: Spending
Clothing 20
Entertainment 15
Magazine subscription 5
Bus fares 12
Snacks 10
Total Spending 62
Surplus / Deficit for the week 43
Mike has been doing some research into cars and the
one he really wants is $1,600.
1. Based on Mike’s current income and spending, how
many weeks will it take him to save enough for the car?
His parents have said that they will give him $200
towards the car but he must save the rest.
2. Now how long will it take Mike to save up for the car?
3. What advice could you give Mike in order to try and
reduce this time? Be specific in actions he could take.
Strategies to increase savings
Increase income by doing extra jobs
around home or working more hours at
your part time job.
Decrease spending by cutting down on
non-essential spending such as snacks
and excessive entertainment.
Match the term with the definition
Budget Spending which can change each period. Variable Spending
Estimate Spending which does not change each period.
Fixed Spending
Income Any excess of income over spending. Surplus
Spending Unspent income. Savings
Surplus Any excess of spending over income. Deficit
Deficit A guess of future events based on past experience and
information available. Estimate
Variable Money received, can be earned or unearned.
spending Income
Fixed spending Money paid.
Spending
Savings A plan of estimated income and spending for a period of time.
Budget
