F. Financial Literacy · Money and Finances: Moving Money, Sales Tax, Budgets, Credit and Best Value

Making a Budget: A Plan for Your Money

F1.3 A1About 45 minutes

Learning goals

I can explain what a budget is and why people use one.
I can list income, expenses and savings in a budget table.
I can tell fixed expenses from variable expenses.
I can design a balanced budget for different earning and spending situations, and explain my choices.
I can change a budget that spends more than the income.

Words to know

budget
A plan for how money will be earned, spent and saved over a period of time, like a week, a month or one event.

income
Money that comes in, like an allowance, gift money or money earned from a job.

expense
Money that goes out to pay for something.

savings
Money set aside to use later.

fixed expense
An expense that is the same amount every time, like a $40 monthly swimming fee.

variable expense
An expense that changes, like snacks or gifts.

balanced budget
A budget where expenses plus savings equal the income. Every dollar has a job.

Remember from Grade 4

In Grade 4 you learned about needs and wants, and how spending and saving are connected. You made a saving plan to buy something.

In Grade 5 you will put it all together into a budget: a plan that shows where all the money comes from and where it all goes.

Every dollar gets a job

Kai gets $5 a week for helping at home. This month, he also earned $15 shovelling snow for a neighbour. By the end of 4 weeks, his money is gone, and he isn't sure where it went!

A budget helps. Before spending, Kai decides what each dollar will be used for. Then he can save for things he really wants, instead of wondering where his money went.

A freshly shovelled driveway between tall snowbanks, with a snow shovel leaning on the snow. — Shovelling snow for a neighbour is one way to earn income. A budget gives every dollar earned a job. AI-generated image

How to build a budget

Choose the time. A week? A month? One event, like a party?
Add up the income. All the money coming in.
List the expenses. Put needs first, then wants.
Plan savings (and giving, if you like).
Check: expenses + savings should equal the income. If they are more, the budget must change.

Worked example

Example 1: Kai's budget for 4 weeks

Kai's income for 4 weeks is his $5 weekly allowance plus $15 from shovelling snow. He wants snacks after swimming, some fun money, a small donation, and to save for a skateboard. Make a balanced budget.

Income: 4 × $5 = $20. $20 + $15 = $35.
Snacks after swimming: about $1.50 a week × 4 weeks = $6.
Donation to the school food drive: $3.
Fun money (cards, a game app with a grown-up's OK): $8.
Savings for the skateboard: what is left. $35 − $6 − $3 − $8 = $18.
Check: $6 + $3 + $8 + $18 = $35. ✔ Balanced!

Snacks $6, donation $3, fun $8, savings $18. Total $35, the same as the income.

Kai's budget (4 weeks)	Amount
Income: allowance (4 × $5)	$20.00
Income: shovelling snow	$15.00
Total income	$35.00
Expense: snacks after swimming	$6.00
Expense: fun money	$8.00
Giving: food drive	$3.00
Savings: skateboard	$18.00
Total planned	$35.00

A budget table shows income at the top and the plan below.

Kai's $35, from left to right: save $18, fun $8, snacks $6, donate $3.

Fixed and variable expenses

Fixed expenses are the same each time. For a family, rent and many monthly bills are fixed. For Kai, a $40 monthly swim fee would be fixed.
Variable expenses change. Groceries, snacks, gifts and gas for the car can cost more one month and less the next.

When you design a budget, plan the fixed expenses first, because you know exactly how much they are. Then plan the variable ones, leaving a little extra in case they cost more.

Worked example

Example 2: A class winter fun day

Ms. Green's class has $120 to plan a winter fun day. Their plan (tax included): hot chocolate supplies $28.40, snacks $36.75, craft supplies $32.50 and small prizes $18.00. Is the budget balanced? Why did they plan it this way?

Add the expenses: $28.40 + $36.75 = $65.15.
$65.15 + $32.50 = $97.65.
$97.65 + $18.00 = $115.65.
Money left: $120.00 − $115.65 = $4.35.
The class put food and the craft (things everyone uses) first and kept prizes small. The $4.35 left over is a little extra in case something costs more than planned.

The plan costs $115.65, which fits in $120, with $4.35 kept as extra. Adding the $4.35 to an "extra" line makes it balanced.

Worked example

Example 3: Fix a budget that spends too much

Amira's family has $150 for her birthday party. The first plan (tax included): pizza $58.00, cake $32.50, decorations $24.75, a craft activity $28.00 and loot bags $22.00. Fix the plan.

Total: $58.00 + $32.50 = $90.50. $90.50 + $24.75 = $115.25. $115.25 + $28.00 = $143.25. $143.25 + $22.00 = $165.25.
Over by: $165.25 − $150.00 = $15.25. The plan must change.
Amira decides the guests will take home their crafts instead of loot bags. Remove loot bags: $165.25 − $22.00 = $143.25.
Left: $150.00 − $143.25 = $6.75, kept for extra.

Without loot bags, the party costs $143.25, leaving $6.75. (Other fixes can work too, like cheaper decorations plus a cheaper cake, as long as the total is $150 or less.)

The first party plan runs past the $150 line. Taking out the loot bags brings the plan back under budget, with $6.75 left over.

There's more than one good budget

Two people with the same income can make different budgets, and both can be good. What matters is that the budget balances and that you can explain your choices: "I put more into savings because I want a skateboard by spring."

Check in on your budget

A budget is a plan, not a promise. At the end of the week or month, compare what you planned with what you actually spent. If snacks cost more than you planned, change next month's budget.

Just for fun

Kai told his $35, "Every one of you gets a job!" One loonie asked if it could have the job of buying snacks. Kai said, "Sorry, you're in savings."

Hands-on activity

Design three budgets

You need: paper, a pencil, a ruler and a calculator (optional).

Make a budget table for each of these situations. Use the steps in this lesson.

Your own month: use your real allowance, or pretend you get $8 a week. Plan savings, giving and spending.
A family movie night with $40: snacks, a movie rental or tickets, and anything else you want.
A lemonade stand in summer: you expect to sell 30 cups at $1.50 each. Your cups, lemons and sugar cost $14. Plan what you will do with the money you earn.

For each one, write one sentence that explains why you planned it the way you did. Share your budgets with a grown-up and ask, "Would you change anything?"

What to look for: income totalled correctly, needs before wants, expenses + savings = income (or less), and a reason for each plan. (Lemonade stand: 30 × $1.50 = $45 income, $45 − $14 = $31 left to plan.)

Your turn

What is income? Give two examples a Grade 5 student might have.

Fixed or variable? (a) a $40 swimming fee every month (b) money spent on snacks

Lila earns $12 a week walking a neighbour's dog. How much does she earn in 4 weeks? She plans to save $20 and donate $10. How much can she spend?

Is this budget balanced? Income $60. Plan: games $25, gifts $15, snacks $12, savings $8.

Noah's income is $30. He plans to spend $14 on a book, $9 on snacks and $11 on a movie. What's the problem? Suggest a fix.

Ivy saves $9 a week for a $54 sled. How many weeks will it take?

Why should needs go into a budget before wants?

More practice: warm-up

What is a budget?

Income $25. Expenses $18. How much is left?

An allowance of $6 a week for 4 weeks is how much income?

Is birthday money from Grandma income or an expense?

Fixed or variable: an $80 music lesson fee every month?

More practice: on your own

A family's grocery budget is $250 a week. They spend $84.30 on Monday and $96.45 on Saturday. How much is left this week?

Jun gets $40 a month. He wants to save at least $15 and give $4 to an animal shelter. Design a balanced budget for him.

Leah's income is $32. She plans savings $10, art supplies $8.50, a gift for her brother $6.75 and snacks $4.25. Is anything left? What could she do with it?

Theo planned $10 for snacks this month but spent $13.40. By how much was he over? What could he do next month?

Owen gets $10 a week all year. In summer he also earns $25 a week mowing lawns. What is his weekly income in summer? Why should his summer budget be different from his winter one?

Challenge

Ruby wants a $120 bike in 12 weeks. She earns $15 a week. How much must she save each week? How much can she spend each week?

A class raised $600 for a museum trip. The bus costs $285. Tickets are $9 each for 25 students. Is there enough left for a $3.50 snack for each student?

Ruby sells 12 beaded bracelets at $2.75 each. Her beads and string cost $9.60. She wants to save half of what she has left after paying for supplies. How much will she save?

Check your understanding

Quiz

What is a budget?

When is a budget balanced?

Which is a fixed expense?

Income is $40. The plan is $15 + $10 + $12. How much is left to plan?

Income is $50. The plan is $22 + $18 + $15 = $55. What is the best fix?

Sam saves $8 a week. How many weeks until he has $56?

For parents and teachers

What your child is learning: the Ontario curriculum (F1.3) asks Grade 5 students to design sample basic budgets to manage finances for various earning and spending scenarios. Grade 4 covered needs and wants and the link between spending and saving; Grade 5 puts these into a full budget: income, expenses (fixed and variable), savings and giving, and checking that the plan balances. Explaining a plan and revising it are mathematical processes (A1).

Common difficulties:

Forgetting part of the income (for example, multiplying a weekly amount by 4 but leaving out extra money earned).
Not checking the total, so the plan spends more than the income.
Thinking there is one right budget. Many budgets are correct; ask, "Why did you choose that?"

How to help: If you're comfortable, involve your child in a small real budget: a family pizza night, a holiday gift budget, or their own allowance. Let them track what was actually spent and compare it to the plan. You don't need to share family income; a made-up or event budget teaches the same skills.