Have you ever heard the word “budget”? Do you know why it’s important and how it works? Learning about budgets can help you save money for things you want and make you smarter about handling money. Let’s dive in!
A budget is like a plan for your money. It helps you see how much money you have coming in and how much you are spending. This plan can be for a month or a year. By making a budget, you can keep track of your money, making it easier to pay for things and save up. It also helps you avoid spending more money than you have, which can lead to debt. Debt is when you owe money to someone else and have to pay it back.
Let’s learn how to make a budget with our friend Frankie Finance!
First, you need to know how much money you will get. This is called your income. Frankie gets $20 from allowance, $30 for mowing lawns, and $20 for pet sitting each month. So, her total income is $70.
Next, you need to figure out how much money you will spend. There are two types of expenses:
This month, Frankie plans to spend $30 on school lunch, $5 on an online magazine, and $20 on a video game. Let’s see if she has enough money!
Frankie’s income is $70. Her expenses are $30 for lunch, $5 for the magazine, and $20 for the game. She has enough money to buy everything she wants and still has $15 left over!
Sometimes, unexpected things happen. Frankie found out she needs to pay $5 for a school field trip. Luckily, she has enough money in her budget to cover this. She still has $10 left, which she decides to save. Great job, Frankie!
Now it’s your turn! Try making your own budget at home. You can find practice pages and more fun lessons at learnbrite.org. Soon, you’ll be a budgeting expert!
We hope you enjoyed learning with us! Visit learnbrite.org for more free resources and fun activities for learning at home or in school.
Budget Detective: Become a budget detective at home! Ask your parents or guardians if you can help with a small budget for a family activity, like a movie night or a picnic. Write down the income (how much money you have to spend) and list all the expenses (like snacks, tickets, or supplies). See if you can plan the activity without going over budget. Discuss with your family how you decided what to spend money on and what to save.
Budget Jar Game: Create three jars labeled “Spend,” “Save,” and “Share.” Use play money or real coins to divide your weekly allowance or any money you receive into these jars. Decide how much to put in each jar. The “Spend” jar is for things you want to buy soon, the “Save” jar is for something special you want in the future, and the “Share” jar is for helping others or gifts. At the end of the month, see how much you have in each jar and talk about your choices with a family member.
Budget Story Time: Imagine you are Frankie Finance and write a short story about a month in your life. Include how you earn your income and what you decide to spend your money on. Think about any surprises that might happen and how you handle them with your budget. Share your story with your class or family and discuss what you learned about budgeting through your story.
Here’s a sanitized version of the provided YouTube transcript:
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**Financial Literacy for Kids: Part Two – Making a Budget**
Do you know what the word “budget” means? Do you know why and how budgets are used? Budgeting is a skill that can help you learn how to save for something you want to buy and help you become more financially literate. Ready to get started?
A budget is a spending plan based on income and expenses. In other words, a budget estimates how much money you earn, receive as gifts, and spend over time, typically by month or by year. Making a budget helps create financial stability because it lets you track how much you spend and how much you can save, which makes paying bills and saving money easier. Another way a budget can be helpful is to ensure you spend within your means so you don’t spend more money than you have. If you spend more money than you have saved, you will go into debt. Debt is money you borrow from someone that must be repaid.
So we know that budgets are important, but how do we make one? Let’s ask our friend Frankie Finance.
Hey Frankie, ready to help us make a budget? First, you need to figure out how much money you expect to earn or receive from gifts. That is called your income. Each month, Frankie gets a $20 allowance, $30 for mowing lawns, and $20 for pet sitting, which means she will have a monthly income of $70.
Next, Frankie has to figure out how much money she thinks she will spend. There are two types of expenses: fixed and variable. Fixed expenses are things you pay the same amount for each time, like school lunch. Variable expenses are the opposite; they vary or change. For instance, one month Frankie wants to buy a pair of pants, and the next she wants to buy a baseball glove. The prices of these items are different, which means that the expenses are harder to plan for.
This month, Frankie will spend $30 on school lunch and wants to spend $5 on a monthly online magazine subscription. She also wants to buy a video game that costs $20. Will she have enough for the video game? Let’s look at her budget. If we compare Frankie’s income with her expenses, we see that she does have enough money to buy the video game, with $15 to spare.
It’s great that Frankie has enough money to pay for her needs (school lunch) and her wants (magazine subscription and video game). But it’s important to remember that income and expenses are often estimated. Sometimes unexpected expenses happen, so you have to make sure your budget is flexible and that you save for contingencies, which are unforeseen changes.
Frankie finds out she has to contribute $5 to her school if she wants to go on a field trip to the museum. Luckily, this contingency did not exceed her budget, so she is able to go. The best part is she still has $10 to spare, which she is going to put into her savings account. Now that is some effective budgeting! Way to go, Frankie!
Now it is your turn at home. Try this exercise out for yourself! You can download this lesson plan on learnbrite.org and print off some practice pages. Before you know it, you will be a budgeting pro and on your way to becoming financially literate.
Hope you had fun learning with us! Visit us at learnbrite.org for thousands of free resources and turnkey solutions for teachers and homeschoolers.
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This version removes any unnecessary filler words and maintains a clear and educational tone.
