Planning and preparing a budget is important for good money management. It involves listing all expenses to balance income and expenditures and ensure needs are met before wants. The steps include determining monthly income, listing expenses, allocating amounts to fixed and flexible expenses, and checking if total expenses match income to avoid overspending. An example budget plan allocates percentages of monthly income to expenses like food, housing, education, and savings. Sticking to a budget requires keeping expenses in separate envelopes, making shopping lists, and only spending allotted amounts.

1. Planning and Preparing a Budget

2. Planning and Preparing a Budget
Why is budget important?

3. Planning and Preparing a Budget
Why does one need to list down all expenses for
the future?

5. A budget is a plan of how the
family income should be spent.
It is easier to control
spending if you have a budget.
Planning and preparing a budget
are the essential ingredients in
good money management.
Planning and Preparing a Budget

6. Having a list helps you to:
• Balance your income andyour
expenditures.
Expenditure > Income = debt
Income > Expenditure = savings

7. Having a list helps you to:
• It gives a feeling of comfort and satisfaction
knowing that your income is enough, then
you have savings.

8. Having a list helps you to:
• It enables the family to list down its
needs and wants and to prioritize the
needs more than the wants.

9. Having a list helps you to:
• It gives the family a full and better life
knowing that the needs are satisfied
first before the wants.

10. Having a list helps you to:
• It is a constant reminder that you are in
control of the family finances, thus it
reduces worries, tension, and stress.

12. Steps in Making a Budget
Know your income or allowances for a definite period of time
(monthly, weekly, or twice a month)
Make a list of expenses.
Determine the amount to be spent on fixed and flexible expenses.
Add the expenses for these two catergories.
Check on the figures to find out if you are spending the right amount where you need to.
Do your total expenses balance with your income?Are you overspending?

13. Below is an example of a
budget plan.
Expenses Percentage Amount
Food 40 % ₱ 16,000
Housing 15 % ₱ 6,000
Education 11 % ₱ 4,400
Medical and dental care 4 % ₱ 1,600
Transportation allowance 5 % ₱ 2,000
Clothing 5 % ₱ 2,000
Miscellaneous 10 % ₱ 4,000
Operating Expenses 5 % ₱ 2,000
Savings 5 % ₱ 2,000
TOTAL 100 % ₱ 40,000
The family’s monthly income is ₱40,000. This is a combined net income of a couple with four
children. Two of their children are studying in elementary and the other two are in high
school. This family lives near the public elementary and secondary schools where the
children study. The couple work just within the city having one-ride minimum fare.
₱ 40 000 x 40 %
₱ 40 000 x 0.40
= ₱16 000
Example:

14. Here are the steps to plan your family’s budget
1. Have a separate envelopes for your
intended expenses.
2. Keep a list of what to buy before shopping.
3. Bring the required amount of money to spend.
4. Stick to your list when buying.
5. Buy your needs first before anything else.