Income VS Expense

This is money that is leaving your account. Think fees, bills, taxes, and spending [this includes putting aside money for later like a savings account]

Expenses -

This is money earned through a job [often called a wage or income], present or gift, or money earned in a sale [small business, garage sale, etc.]

Income -

Balancing a Simple Budget

As you start working and earning money it becomes vital [important] to learn how to budget your money.

Budget- a system that allows you to make sure that you never overspend.

Balanced Budget - when your income equals your expenses.

How to Balance a Simple Budget:

How do you BALANCE a BUDGET?

1. ADD up all your income.

2. ADD up all your expenses.

3. Subtract your income from Expenses

Teacher Model: COPY in BOOK

Maria earns $1,975 from her job each month. Below are her expenses for the month:

•Rent - $700

•Car Payment - $150

•Utilities - $300

•Monthly Student Loan - $375

•Groceries - ?

How much money is available for grocery shopping this month?

How to fix an OVER BUDGET?

When your Expenses is MORE than your INCOME you are considered OVER BUDGET. To fix this, you must find an expense that can be decreased. When determining an expense to decrease, first consider: is it a FIXED Expense [same amount each time] or a VARIBLE Expense [can change amount].

• FIXED Expenses: rent, car payments, groceries, utilities, and gas

• VARIABLE Expenses: entertainment, eating out, clothes shopping, and other expenses