Wise Budgetting

Key Terms/Concepts

  • Budget: The amount of money set aside for planned expenses, specifying how much will be spent or allocated during a certain period.

  • Budgeting: The process of planning how to allocate family resources effectively.

  • Needs: Essential items necessary for survival, such as food, shelter, and clothing.

  • Wants: Non-essential items that are desired but can be postponed.

Facts to Memorize

  • Basic needs include food, shelter, clothing, and water.

  • Social needs include participation in educational trips, social events, and owning personal items like cellphones.

  • Budgeting is the planned allocation of money for expenses.

Reference Information

  • Basic Needs: Essential for survival.

  • Social Needs: Enhance quality of life but are not essential for survival.

  • Factors affecting family budget: Income, family size, needs and wants, family values.

Concept Comparisons

Basic Needs

Social Needs

Essential for survival

Enhance quality of life

Examples: food, shelter, clothing

Examples: field trips, cellphones

Must be prioritized in budgeting

Can be postponed or adjusted in budget

Problem-Solving Steps

To allocate a budget effectively:

  1. Identify Income: Determine total income available for the month.

  2. List Needs and Wants: Categorize expenses into needs (essential) and wants (non-essential).

  3. Prioritize Needs: Allocate funds first to basic needs (food, shelter, clothing).

  4. Allocate for Wants: After covering needs, allocate a portion of the budget for social needs and wants.

  5. Review and Adjust: Regularly review the budget to adjust for any changes in income or expenses.