Lesson 7.1: What Is a Budget? 

Key Vocabulary

Understanding budgeting starts with a few important words. These terms will help you talk about money and make smart decisions.

• Budget
  A plan that shows how much money you earn and how much you expect to spend.
  Example: “I made a budget to make sure I can save for new shoes and still pay my phone bill.”

• Balanced Budget
  A budget where your income and expenses are equal, or where you spend less than you earn.
  Example: “My budget is balanced because I earn $100 and only spend $90.”

• Income
  Money that you receive, like a paycheck, allowance, or gift.
  Example: “My income is $60 a week from working at the grocery store.”

• Expenses
  Things you spend money on, like food, gas, clothes, or subscriptions.
  Example: “My biggest expense this month was my new hoodie.”

• Savings
  Money you set aside to use later, usually for a goal or emergency.
  Example: “I’m putting $10 a week into savings for a new phone.”

• Wants vs. Needs
  Needs are things you must have to live, like food and shelter. Wants are extras you enjoy but don’t need to survive.
  Example: “Groceries are a need, but delivery pizza is a want.”

How a Budget Works

A budget works by helping you plan two things: how much money you have (income) and how much money you spend (expenses). Once you know those two things, you can make better choices and avoid running out of money too soon.

Income is all the money you bring in. This could come from a part-time job, babysitting, doing chores at home, or even birthday gifts. Some people get income from the government or other support programs. No matter where it comes from, income is what you have to work with.

Expenses are everything you spend money on. These can be fixed expenses (the same amount every time) like a monthly phone bill, or variable expenses (different amounts each time) like going to a restaurant or buying snacks. Some expenses are for needs—like bus fare or groceries—and others are for wants—like a new hoodie or streaming service.

Here’s an example:
Let’s say you earn $80 a week at your job. You spend $25 on food, $10 on your music app, $20 on savings, and $15 on going out. That leaves you with $10. This is a simple budget, but it shows how income and expenses work together.

The goal is to create a balanced budget—that means your income and expenses match, or your income is more than your expenses. If you spend more than you earn, your budget is not balanced, and you might run into problems, like not having money for important things.

A budget can also help you plan ahead. For example, if you know your birthday is coming up and you want to buy a new outfit, you can cut back on other spending now and save the extra money. It’s not about being perfect—it’s about knowing where your money is going and using it in a way that works for you.

Real-Life Budgeting Example – Janet’s Story 

Let’s take a closer look at Janet, a high school student who uses a budget to manage her money each week.

Janet has a part-time job restocking shelves at a local grocery store. She works a few hours after school and earns about $50 each week. She’s saving up for a new scooter, but she also wants to enjoy her weekends and buy lunch during the week.

Here’s how Janet’s weekly budget looks:

• Income:
  $50 from her job

• Expenses:

  • Lunch during the week: $20

  • Savings for a scooter: $15

  • Going out with friends: $8

  • Leftover money: $7

Janet has learned to think about her needs first—like food. Then she sets aside money for her goals, like buying that scooter. Finally, she spends a little on wants, like going out with her friends. The $7 left over gives her a choice: she can spend it on something small or add it to her savings to reach her goal faster.

Some weeks, she doesn't use all the money for going out, so she adds that to her savings too. This shows that even small choices can help her stay on track.

Janet’s budget is balanced. Her income ($50) equals her total expenses ($50). Because she’s tracking where her money goes, she doesn’t feel stressed about spending. She’s in control.

You don’t need to earn a lot to use a budget—you just need to plan. Like Janet, you can build strong money habits by starting small and thinking ahead.

Understanding Balanced vs. Unbalanced Budgets

A balanced budget happens when your total income is the same as, or more than, your total expenses. This means you're not spending more than you have, and you’re using your money in a smart way. A not balanced budget means your expenses are higher than your income. If that happens, you may run out of money or go into debt.

Let’s look at a few examples to help you see the difference:

Balanced Budget Example
Maya earns $100 a week working at a local restaurant. She spends:

• $30 on transportation

• $25 on lunch and snacks

• $20 into savings

• $25 on other things like movies and small shopping

Her total expenses are $100. Her income is also $100. This means her budget is balanced.

Not Balanced Budget Example
Tyrell earns $80 a week from his part-time job. He spends:

• $40 on fast food

• $30 on online shopping

• $20 on a game pass subscription

His total expenses are $90, but his income is only $80. He’s spending more than he earns. His budget is not balanced.

Even going over by $5 or $10 each week can become a problem if it keeps happening. You might need to borrow money from someone, skip something important, or dip into savings that you were trying to build. A not balanced budget can make it harder to reach your goals.

Sometimes, expenses go up unexpectedly—like if your phone bill is higher than usual or you need to buy school supplies. That’s why it helps to check your budget often and adjust when needed.

To keep your budget balanced:

• Track your spending regularly

• Prioritize needs over wants

• Set realistic spending limits

• Leave a little room for surprise costs

A balanced budget helps you feel more confident, more in control, and ready to handle whatever comes your way.

Why Budgets Change with Life Stages

As you grow and your life changes, your budget needs to change too. What you spend money on in Grade 10 isn’t the same as what you’ll spend money on after graduation, when you move out, or when you get your first full-time job. Your income, goals, and priorities shift over time—and your budget should shift with them.

Let’s look at some examples of how budgets change through different life stages:

1. High School Student
Right now, your income might come from a part-time job, doing chores, or receiving an allowance. Your expenses might include:

• Snacks or lunch at school

• Phone plan or data

• Streaming subscriptions

• Gas or bus fare

• Saving up for something fun, like a concert or new clothes

Your goals might include saving for a new phone, driver’s license fees, or graduation.

2. After Graduation
Once high school ends, many people start working more hours, go to college or university, or take training programs. You might have more income, but also more responsibilities:

• Rent or living costs

• Groceries

• Tuition or school supplies

• Transportation (car payments, insurance, or bus passes)

• Saving for long-term goals like travel or moving to a new city

Your budget now needs to cover bigger expenses and help you plan further ahead.

3. Young Adult
As a young adult, you may have a full-time job or be working toward a career. You’ll likely have more income but also more ongoing costs:

• Monthly bills like Saskpower, Wi-Fi, and insurance

• Debt payments (like student loans)

• Supporting family or contributing to household costs

• Saving for emergencies, vacations, or future goals

You might also be thinking about things like moving out, buying a car, or building credit.

The main idea? Your budget should grow and change with you. There’s no one right way to budget—what matters is that you stay aware of your money and adjust when life changes.

When you learn how to budget now, it’s easier to stay on track later. You’ll already have the habits you need to handle bigger responsibilities and more freedom.

Reflection Questions

Take a few minutes to think about your own habits and goals when it comes to money. Use the questions below to reflect on what you’ve learned about budgeting.

You can write your answers in a notebook or talk about them in class.

1. What are three things you spend money on each week?

   • Are they needs or wants?

2. What is something you would like to save up for this year?

   • How much do you think it will cost?

3. What could you change in your budget to help you save more money?

   • Is there something you could cut back on or plan differently?

4. Have you ever run out of money before you expected to?

   • What happened, and how did you handle it?

5. Why do you think it’s important to keep your budget balanced?

   • How could it help you in the future?

Multiple-Choice Check for Understanding

Circle the correct answer for each question below.

1. What is a budget?
A. A way to earn more money
B. A plan for spending and saving money
C. A shopping list
D. A type of bank account

2. If your expenses are more than your income, your budget is:
A. Balanced
B. Perfect
C. Not balanced
D. A savings plan

3. Which of the following is an example of a need?
A. New headphones
B. Streaming subscription
C. Take-out pizza
D. Groceries

4. Maya earns $100 and spends $90. What is true about her budget?
A. It is not balanced
B. She is spending too much
C. It is balanced
D. She has no savings

5. Why might your budget change as you get older?
A. You stop spending money
B. Your goals and expenses change
C. You don’t need to save anymore
D. Budgeting is only for teens