Lesson 27 — Activity 2: Preparing a Monthly Budget
Completion requirements
Lesson 27 — Activity 2:
Preparing a Monthly Budget
Lesson 27 — Activity 2:
Preparing a Monthly Budget
In this activity, you will prepare a budget for one month. Budgets can be used for families, individuals, schools, businesses, governments — in fact, almost anyone. This activity will look at one individual, Carl. He is a worker on the oil rigs in Northern Alberta. He has an apartment in Peace River where he spends his days off.
©iStock
In this activity, you will prepare a budget for one month. Budgets can be used for families, individuals, schools, businesses, governments — in fact, almost anyone. This activity will look at one individual, Carl. He is a worker on the oil rigs in Northern Alberta. He has an apartment in Peace River where he spends his days off.
©iStock
Carl's income is $4,500 per month. His apartment costs $750 per month (utilities included), his cellphone plan costs $55 per month, payments on his SUV are $1,000 per month, and food costs are $110 per month (most of his meals are provided in the work camp.) How much money can he afford to put into his savings? To find out, let's first use a table to make a budget for Carl. We will include $500 a month for other expenses such as clothes and entertainment.
Questions
Use the table above to answer the following questions. Write down your answers on a piece of paper.
When you are finished, click on the tab below to check your answers!
When you are finished, click on the tab below to check your answers!
1. There are five expense items and only one income item; does that mean more money goes into expenses than into income? Which is larger and by how much?
2. Which is the largest expense item? Which is the smallest expense item?
The budget has leftover income that can be used for a various things such as savings. The oil industry, like many other areas, has good years where there are high prices and lots of work and bad years where prices are low with little work. Most jobs slow down or carry the risk of unemployment. At those times, there is little or no income. People must be prepared to fill the gap from their savings.
3. Carl has $2,100 available each month for savings. How much could he save in one year?
4. Can you think of any expense items that may have been missed in the budget above?
Self-check!
Try This!
Now it's your turn to organize information into a table to create a monthly budget.
Create a table with the following headings:
Complete the table by doing the following:
- Write
the amount that you pay MONTHLY for each expense into your table. Note: If
you do not pay for one of the expenses (rent, for example), you can
enter the amount as zero.
- If there are other monthly expenses that you have, you can add those to the monthly budget table as well.
- Total your expenses, and write that amount in the table.
- Write the amount that you earn (your wages) in the table under "Income."
- Is
your monthly income higher than your total monthly expenses? If so,
that's great! That means you have enough money to pay all of your bills.
If not, you may need to look at your budget and see if you can lower
some of your expenses (your clothes and entertainment, for example.)