Living on a Budget PDF
Preview Living on a Budget
M I N D E REAL WORLD MATH: PERSONAL FINANCE N 21st L(cid:31)(cid:30)(cid:31)(cid:29)(cid:28) (cid:27)(cid:29) Century Skills Library Clothes, movies, school supplies—these are just a few of the things that you might spend your money on. How do you decide how much money to spend now and how much to save for later? Making a budget is a great strategy if you want to (cid:26) B(cid:25)(cid:24)(cid:28)(cid:23)(cid:22) keep track of your income and expenses. Read this book to fi nd out how to create L I a budget and learn how to manage your money like a pro! V I N The Real World Math: Personal Finance books show readers how to use their basic G math skills to begin developing the fi nancial literacy necessary to succeed in the O 21st century economy. Other titles in the series include: N • Investing—Making Your Money • Saving for the Future A Work for You • Smart Shopping B • Payday! • Using Credit Wisely U D To guide your reading, look for these notes that will help build the understanding G and skills you’ll need in the 21st century. Look for the following margin notes: E T Learning & Innovation Skills You need to learn about lots of things, but you also need to learn how to learn. These notes give you hints about how to use what you know in better and more creative ways. 21st Century Content You study reading, math, science, and social studies. You also need to learn about the world of work and your community. These notes tell you about business and money. They also give you ideas about how you can help yourself, your community, and the world. Life & Career Skills These notes tell you about skills you will use throughout your life. They give you ideas about how to work well with others, make good decisions, and achieve your goals in life. ISBN-13: 978-1-60279-004-9 ISBN-10: 1-60279-004-3 9 781602 790049 21st Century Skills Library REAL WORLD MATH: PERSONAL FINANCE Living on a Budget Cecilia Minden Cher r y Lake Publishing Ann Ar bor, Michigan Published in the United States of America by Cherry Lake Publishing Ann Arbor, MI www.cherrylakepublishing.com Math Education Adviser: Timothy J. Whiteford, PhD, Associate Professor of Education, St. Michael’s College, Colchester, Vermont Finance Adviser: Ryan Spaude, CFP®, Kitchenmaster Financial Services, LLC, North Mankato, Minnesota Copyright ©2008 by Cherry Lake Publishing All rights reserved. No part of this book may be reproduced or utilized in any form or by any means without written permission from the publisher. Library of Congress Cataloging-in-Publication Data Minden, Cecilia. Living on a budget / by Cecilia Minden. p. cm.—(Real world math) ISBN-13: 978-1-60279-004-9 ISBN-10: 1-60279-004-3 1. Budgets, Personal—Juvenile literature. 2. Finance, Personal—Juvenile literature. I. Title. II. Series. HG179.M5254 2008 332.024—dc22 2007006960 Cherry Lake Publishing would like to acknowledge the work of The Partnership for 21st Century Skills. Please visit www.21stcenturyskills.org for more information. Table of Contents C h a p t e r o n e What Is a Budget? 4 C h a p t e r t w o Where Does Your Money Go? 7 C h a p t e r t h r e e Do the Math: Create a Simple Budget 12 C h a p t e r f o u r Do the Math: Help! I’m Over My Budget 16 C h a p t e r f i v e Budgeting as a Way of Life 23 Real World Math Challenge Answers 29 Glossary 30 For More Information 31 Index 32 About the Author 32 ChapTer One What Is a Budget? O n Saturday, Elyse was planning to go to the movies with her friend Kadir. But when she got to the theater, she opened her wallet and discovered she had only $2.00. Her parents had given her $10.00 for her allowance just If you don’t think before your spend your money, you may soon have an empty wallet! three days before. What did she buy with her money? She couldn’t even remember. She probably bought some snacks, and she thinks she bought a magazine, but she doesn’t know 21st Century SkillS library where she put it. Elyse’s money had slipped through 21st Century C her fingers. She needs a budget. ontent Savings are an What is a budget? A budget is a plan for how important part of your budget. By putting your you are going to use your income to pay for your savings in a bank, your money can earn you more money. expenses. It is a written record of how much you Banks will pay you money, called interest, earn and what you spend it on. If your income is to keep your savings with them. even small amounts can add up greater than your expenses, you have a balanced quickly. Let’s say you saved $30 a month budget. Learning to balance a budget is an and put it in a savings account earning 5 important skill in life. percent interest. at the end of five years, you would have Income is all the money you receive. Your more than $2,000 in your account! allowance is one type of income. Usually, your allowance increases as you get older. In some families, the amount of your allowance is related real World Math: living on a budget to what jobs you do around the house. Wages are income you receive when working for others. With wages, you get a set amount of money for each hour worked. Gifts are another source of income. You might receive money for birthdays or other special occasions. Allowances, wages, and gifts are three ways that students can receive income. Expenses are the money you spend. Expenses might include food, clothing, entertainment, donations to charity, and savings. Balancing your budget isn’t hard, but it does take some planning. Let’s get started! REAL WORLD MATH CHALLENGE MMMeeegggaaannn’’’sss pppaaarrreeennntttsss gggiiivvveee hhheeerrr $$$222000...000000 aaa wwweeeeeekkk aaasss aaannn aaallllllooowwwaaannnccceee... ooonnn ttthhheee dddaaayyysss ttthhhaaattt MMMeeegggaaannn doesn’t want to bring lunch from home, she has to use her own money to buy lunch at the school cafeteria. Megan uses $12.00 each week for lunches, donates $$$$2222....00000000 aaaa wwwweeeeeeeekkkk ttttoooo tttthhhheeee aaaannnniiiimmmmaaaallll sssshhhheeeelllltttteeeerrrr,,,, ppppuuuuttttssss $$$$4444....00000000 iiiinnnn ssssaaaavvvviiiinnnnggggssss,,,, aaaannnndddd ssssppppeeeennnnddddssss $$$$2222....55550000 oooonnnn ssnnaacckkss.. WWWWWhhhhhaaaaattttt aaaaarrrrreeeee MMMMMeeeeegggggaaaaannnnn’’’’’sssss wwwwweeeeeeeeeekkkkklllllyyyyy eeeeexxxxxpppppeeeeennnnnssssseeeeesssss????? DDDDDoooooeeeeesssss ssssshhhhheeeee hhhhhaaaaavvvvveeeee aaaaa bbbbbaaaaalllllaaaaannnnnccccceeeeeddddd bbbuuudddgggeeettt??? ((TTuurrnn ttoo ppaaggee 2299 ffoorr tthhee aannsswweerrss)) 6 21st Century SkillS library ChapTer TWO Where Does Your Money Go? B efore you set up a budget, you need to think about what things you spend money on. The most important question to ask about each item is, do I need it? Are the things you buy needs, or are they wants? Thinking about what you spend your money on is the first step in creating a budget. real World Math: living on a budget You need clothing, but you can control how much of your money you spend on clothes. Needs are the things you must have to survive. The most basic needs are food and water, shelter, and clothing. Other needs include school supplies and transportation. Wants are things you would like to have but don’t absolutely have to have. These might include CDs, expensive 21st Century SkillS library
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