A budget is a financial tool to help you keep you income and expenses in balance. It is often represented in the form of a graph.

Example:

1. Lori has is currently working, and her net pay is approximately $2000 per month. She would like to return to university in the future for more education, and had decided to put as much money as possible away for that. Taking into account such expenses such as: Rent, utilities, food, transportation, entertainment and any other possible costs, determine ho much Lori should be able to save every month.

a) Determine Lori's expenses

Rent

Utilities

Transportation (bus pass)

Food

Entertainment

Clothing

Miscellaneous

 

b) Determine how much she should spend on each item

 

Rent--$450

Utilities--$75

Transportation (bus pass)--$55

Food--$150

Entertainment--$50

Clothing--$50

Miscellaneous--$75

 

 

c) Add all the expenses together

 

$450 + $75 + $55 + $150 + $50 + $50 + $75 = $855

 

 

d) Subtract Lori's expenses from her income

 

$2000 - $855 = $1145

 

Lori should be able to put $1 145 towards her future schooling every month.

 

e) Represent information in a Pie Graph

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