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Budgeting and Saving Facts & Worksheets

budgeting and saving is the process of planning how to spend or allocate your money

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Since we are young, our parents teach us the different ways of budgeting and saving money. Sometimes we practice budgeting and saving without knowing it. The most common scenario where we budget and save is when we buy what we need in the market.

See the fact file below for more information on Budgeting and Saving or alternatively, you can download our 23-page Budgeting and Saving worksheet pack to utilise within the classroom or home environment.

Key Facts & Information

BACKGROUND

  • The process of planning how to spend or allocate your money is known as budgeting.
  • On the other hand, saving is a process where excess money is put aside when there is some left over from deducting total expenses from an income.
  • The term budget comes from the Old French word “bougette”, which means a small leather purse.
  • Ordinary citizens during the Athenian democracy played a part in setting their budget. 
  • Citizens’ involvement in making decisions about their budget had a positive impact on the Ancient Greek state.
  • Save is a word from Middle English “saven” or “sauven”, which were borrowed words from the Old French word “sauver”, and from the Late Latin word “salvare”, which means to save. 
  • Before money, goods and essentials were acquired through a barter exchange.
  • Then, after some time, money was introduced, which was used to purchase products.
  • There were still no banks to keep money during ancient times.
  • One way to keep money and valuable items was by digging underground storage areas, while others bought properties or animals.
  • Other former ways to save were keeping money in a piggy bank, under a mattress, acquiring war bonds, exchanging for gold, and keeping money in the attic and walls, cans, and envelopes.
  • The method of budgeting started in England to control expenditure.
  • England adopted the procedure of budgeting to manage the country’s national finances for two main reasons.
  • One was to check the king’s power to impose burdensome taxes upon the people, and the other was to control the spending of public officials.
  • Three characteristics of budgeting and saving include:
    • In a budget, savings are not included; however, saving is part of a budget.
    • A budget is a spending tool while saving is a security tool.
    • Budgeting is usually done for a defined time, and the plan can be used immediately, while saving can last for days, weeks, months, or years.

TYPES OF BUDGET

  • There are several types of budget according to the purpose.
  • Here are some of them:

Personal Budget

  • A personal budget is also called a household budget.
  • A family or an individual ensures that their money will be enough to cover their expenses until the next payday.
  • Necessities must be prioritized over wants.
  • The 50-30-20 budget plan is a famous example of budgeting.
  • Fifty percent is allocated for necessities, thirty percent for wants, and twenty percent for paying debts, insurance, and emergency savings.

Government Budget

  • This is a financial budget prepared for legislature by the government or political entity, containing anticipated tax revenues and a list of expenditures for the next year.

Corporate Budget

  • This is a budget made for a business that foresees and estimates finances.
  • It also includes revenues and expenses derived from the previous standing of the business from the previous year.

Master Budget

  • This includes lower-level budgets of the organization used as a central planning tool to prepare an overall budget.

Operating Budget

  • This type of budget is similar to the profit and loss report that includes fixed costs, variable costs, capital costs, and non-operating expenses. 

Cash Budget

  • This is created through sales forecasts, production, and estimates of receivables and payables.
  • It is a kind of budget that monitors the cash flow of the business for a defined period of time.

Financial Budget

  • This budget is made by the business to determine the capital needed for its short- and long-term needs.
  • It contains the company’s assets, liabilities, and equity that gives an overall view of the status of the business.

Static Budget

  • This is a type of budget that is fixed throughout the year. 
  • The users of static budgets are usually organizations such as non-profit, educational, and government bodies. 

Labor Budget

  • This is a budget set for hiring employees to fulfill the company’s goals.
  • It contains detailed plans on the payroll of its employees.

TYPES OF BUDGETING METHODS

  • In a company, there are different ways to come up with a budget plan.
  • Here are some of them:

Incremental Budgeting

  • In incremental budgeting, a new budget is developed by creating minimal changes to the current budget.
  • This is considered the simplest and easiest budgeting method.
  • However, innovation is also limited in this method.

Zero-Based Budgeting

  • This is a method where all figures are cleared to start a new budget, and the numbers to be used must all be justified contrary with the previous budget history.

Negotiated Budgeting

  • The budget in negotiated budgeting is fixed by managers and employees, considering the targets and goals of the top management.
  • The senior management can set up their targets and it is up to the managers and employees to prepare and plan the budget.

Value Proposition Budgeting

  • Items in the expenditure list are thoroughly evaluated to weigh their value.
  • Expenses that are deemed unnecessary are eliminated.

Participative Budgeting

  • The financial plan made under this method is created by top-level executives with the help of the managers and other employees.
  • It is considered a bottom-up approach.
  • Top management can provide input, but they more or less take the endorsements of their subordinates.

Activity-Based Budgeting

  • This method is based on activities done, which are recorded and analyzed to predict costs.
  • Activities that incur costs are thoroughly inspected, and find ways money can be efficiently spent for them without compromising.
  • The budget is made based on such assessments.

TYPES OF SAVINGS

Emergency Savings

  • This money is allocated for unexpected expenses or emergencies.

Long-Term Savings

  • Money from these savings is for the security of an individual’s future.
  • There are several types of long-term savings, such as investments, educational funds, and even retirement.

Goal Savings

  • This kind of saving is allocated mostly for people’s wants.
  • Some examples include purchasing plane tickets for vacations, a new car, new clothes and shoes, and even new gadgets.

BENEFITS OF BUDGETING AND SAVING

  • Some benefits of budgeting and saving are:
    • They promote financial stability
    • They build financial independence and freedom
  • They help an individual focus on their financial goals and track their spending
  • They motivate people to pay their bills on time
  • They help people prepare for emergencies

BUDGETING AND SAVING FOR KIDS

  • It is ideal for parents to teach their children about budgeting and saving while they are young.
  • It is a way for them to prepare their children for the future.
  • These are some ways in which adults can teach children how to save:
    • Set a good example
    • Learn when to say yes and when to say no
    • Give them inspiration and motivation to save money
    • Open a bank account with and for them and look for applications that will suit them
    • Talk about the value of money with them
    • Discuss buying and spending on wants and needs
    • Make them work for their wants

EFFECTIVE BUDGETING AND SAVINGS

  • Effective ways of budgeting and saving are:
    • Monitoring income and expenses by gathering paper bills, receipts, stubs, and bank statements.
    • Making a budget worksheet
    • Keeping track of your savings, income, and expenses
    • Determining where your expenses are coming from
    • Creating efficient ways to reduce your expenses and strictly following your budget plan

Budgeting and Saving Worksheets

This is a fantastic bundle that includes everything you need to know about Budgeting and Saving across 23 in-depth pages. These are ready-to-use worksheets that are perfect for teaching students about Budgeting and Saving which is the process of planning how to spend or allocate your money.

Complete List Of Included Worksheets

  • Budgeting and Saving Facts
  • Money Tips
  • Fifty-Thirty-Twenty
  • Weekly Plan
  • Going Shopping
  • Budget Plan
  • Save and Buy
  • Play and Save
  • We Have a Situation
  • How Do I Spend?
  • Reflection

Frequently Asked Questions

What are the different types of budgets?

There are various different types of budgets, some of them are: personal, government, corporate, operating, and labor budgets.

What is incremental budgeting?

In incremental budgeting, a new budget is developed by creating minimal changes to the current budget. This is considered the simplest and easiest budgeting method. However, innovation is also limited in this method.

What are the different types of Savings?

The most common types of savings are called long-term, emergency, and goal savings.

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Link will appear as Budgeting and Saving Facts & Worksheets: https://kidskonnect.com - KidsKonnect, May 31, 2022

Use With Any Curriculum

These worksheets have been specifically designed for use with any international curriculum. You can use these worksheets as-is, or edit them using Google Slides to make them more specific to your own student ability levels and curriculum standards.

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