SESSION # 1What is a Budget?

WHAT IS A BUDGET?

• A budget is a plan to spend your money

• Budgets help us ensure we will always have money for the things we need or want

WHO USES A BUDGET?

•EVERYONE• It doesn’t matter how much

money you have!

DO YOU THINK YOU BUDGET WELL?

•Let’s find out!

1st RULE OF BUDGETING

SPEND LESS THAN YOU EARN!

KEY COMPONENTS OF A BUDGET

•INCOME: All forms of earnings• Pay cheques, child support, disability payments,

pensions, public assistance, unemployment, gifts• All money that goes IN to your bank account

KEY COMPONENTS OF A BUDGET

•EXPENSES: All forms of payments• All money going OUT of your bank account

EXPENSES

• Fixed Expenses: Payments that stay the same every month• Example: rent, mortgage payment

EXPENSES• Variable Expenses: Payments that change

from month to month• Example: utilities, groceries, gas, child

care

EXPENSES•What is considered an expense?

EXPENSESRent Daycare Hair cuts/personal care

Home phone Bus pass Clothing

Cell phone Car insurance Gifts

Water Vehicle maintenance (oil changes, etc.)

Entertainment, alcohol, lottery

Hydro Gas Home/renter insurance

Gas Validation sticker renewal Laundry

Cable Medical Care: prescriptions, dental care, eye glasses

Food

Internet Cigarettes Infant/child care accessories

Can anyone think of any other possible expenses that aren’t on

this handout?

EXPENSES•Let’s make some lists of YOUR expenses

EXPENSES• In the table provided make a list of all of YOUR

expenses• You don’t need to add the amounts just yet• Only list the name of the expenses you have

INCOME•What is considered to be income?

INCOMEPay Cheque Child supportSocial Assistance AlimonyGST rebates Baby bonus

Canada Pension Plan (CPP)

Withdrawal from investments such as RRSP, RESP, etc.

INCOME• Can you think of any other sources of

income that you might receive?

INCOME• Let’s make a list of your incomes

INCOME• In the chart provided, list the

names/categories of income you receive• You don’t need amounts yet

INCOME VS. EXPENSES•Budgeting is a balancing act• The goal is for our income to be

higher than our expenses

INCOME VS. EXPENSES• Let’s make a prediction:•When we add the actual dollar

amounts to our charts do you think your income will be higher than your expenses?

QUESTIONS??

LEARNING ACTIVITY 1

•Write 1 paragraph describing your current spending habits:• How do you budget your money now?•What are you hoping to learn?•What do you already know?

NEXT CLASS:• Bring in copies of your bills, pay cheques,

etc.•We are going to create a budget