What I may already know: • It is important to keep a record of our income and expenditure. • Money is in limited supply.
Learning Intentions
In this chapter, I will learn: • What a budget is. • How to record income and expenditure in a budget. • How to understand a budget. • How to present household finances in a chart.
Key Words: Budget Net cash
Surplus Deficit
Opening cash Closing cash
KNOW? There are
now a number of household budget apps available for use on mobile devices. Why not download a free one and explore how it works?
Did You WHAT IS A BUDGET?
In chapters 1 and 3, we learned how to record expected income and expected expenditure separately.
In this chapter we will learn how to combine expected income and expenditure into one plan. This plan is called a budget.
i
A budget is a plan that shows expected income and expenditure for a certain period of time.
Preparing a budget can help an individual or a family to plan how they will spend their money wisely.
A budget can be recorded on paper or using a computer. Electronic budgets can be made using spreadsheet software, such as Microsoft Excel. A spreadsheet is a computer program that shows information in columns and rows. It calculates numbers automatically.
