Creating a Budget

Creating a budget is one of the most important steps when it comes to managing your money. When you create a budget, you can make sure you spend your money wisely and know where every penny goes. Whether you have a job and make money regularly or just get a regular allowance and money for birthdays and holidays, you can create a budget.

Budgets can be written daily, weekly, monthly or yearly. It all depends on how much money you have and how often you need to track it. Most people create weekly or monthly budgets. Let’s start by creating a weekly budget.

A typical budget has three main sections: income, expenses and savings.

The income section of your budget includes all of the money that you earn or receive. How much money do you have to spend this week? (If you do not have any money, pretend you have $50.)

My income for the week is ___________________________________.

Before you think about spending money, you should think about saving money. You want to try and save at least a little bit of all the money that you get. This way you have money in case of emergencies or to help buy more expensive items later on.

How much of your income do you want to save? ________________________________.

Now think about all the things you want to spend money on this week. List them here along with how much each thing might cost.

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Add up the total of everything you want to spend money on.

My total is ________________________________________.

Now add the amount you want to save.

My total expenses + the amount I want to save = _____________________________________.

Is the amount above more or less than your income? If they are less than your income, great! If they are more than your income, you’re going to have to do one of two things: cut some things out or earn more money.

Creating a budget can be as simple as listing the items above on a sheet of paper, but if you want to create a more formal budget, you can use the form below. (Click image to open/download the form as an Excel spreadsheet)

1. Before creating a budget, use the “Money Diary” worksheet to track where you spend your money for two weeks. This will help create a better budget.
2. Sit down with your parents or another family member comfortable sharing their finances with you and ask them to show you what their budget looks like.
3. Pretend you are an adult who earns $3,500 a month. Create a pretend budget to meet all of your needs (food, clothing, shelter, transportation, etc.)

1. If your expenses are more than your income, how can you earn extra money?
2. If your expenses are more than your income, how can you determine what to cut?
3. Why is it important to keep track of your money?