Financial Planning and Budgeting
Financial planning involves managing income and expenses to achieve financial goals. A budget helps you track where money goes and make informed decisions about saving and spending.
What You Need to Know
Key Concept Diagram
Income is money received (wages, allowance, government payments)
Expenses are money spent (rent, food, transport, entertainment)
Budget surplus: income > expenses; budget deficit: expenses > income
Simple interest: I = P x r x t, where P is principal, r is rate (decimal), t is time in years
Saving goals: setting aside a fixed amount regularly builds savings over time
Key Vocabulary
Budget
A plan that shows expected income and expenses over a period of time
Income
Money received from work, investments, or other sources
Expense
Money spent on goods and services
Simple Interest
Interest calculated only on the original amount (principal): I = Prt
Knowledge Check
Select the correct answer for each question. Click "Check Answer" to see if you are right.
Question 1
James earns $250 per week. His weekly expenses are: food $60, transport $40, entertainment $30, savings $50. How much does he have left over?
Question 2
A savings account earns 4% simple interest per year. If $500 is deposited, how much interest is earned after 3 years?
Question 3
Which of these is an example of a budget deficit?
Key Concepts Summary
- ●Income is money received (wages, allowance, government payments)
- ●Expenses are money spent (rent, food, transport, entertainment)
- ●Budget surplus: income > expenses; budget deficit: expenses > income
- ●Simple interest: I = P x r x t, where P is principal, r is rate (decimal), t is time in years
- ●Saving goals: setting aside a fixed amount regularly builds savings over time