Understanding Credit Scores
9-12
1
What is a Budget?
Lesson Details
Grade Level
9-12
Duration (minutes)
1
Summary
A Financial Literacy lesson introducing budgeting through the idea of income vs. expenses, and the 50/30/20 rule for organizing spending between needs, wants, and savings.
Student Worksheet: What Is a Budget?
Teacher Note: Students can watch the video lesson above and answer the questions. Click the “Teacher Answer Key” dropdown below when you are ready to review the solutions!
Key Concepts:
• Budget: A plan for your money — deciding ahead of time where it should go, instead of wondering where it went.
• Income vs. Expenses: Income is money coming in (paycheck, allowance); expenses are money going out (snacks, gas, subscriptions).
• The 50/30/20 Rule: 50% of income goes to needs, 30% to wants, and 20% to savings.
Instructions: Read each question carefully and write your answer in the space provided.
- Question 1: What is a budget, in your own words?
- Question 2: Give one example of income and one example of an expense.
- Question 3: What happens if your expenses are higher than your income?
- Question 4: In the 50/30/20 rule, what percentage goes to wants?
- Question 5: If you earn $200, how much would go to needs, wants, and savings using the 50/30/20 rule?
- Question 6: Name one “need” and one “want” from your own life, and explain why they belong in different categories.
Click to reveal Teacher Answer Key
1. A plan for your money — deciding ahead of time where it should go.
2. Any valid example, e.g., income: paycheck/allowance/babysitting money; expense: snacks/gas/streaming services/clothes.
3. You’re losing money.
4. 30%.
5. $100 needs, $60 wants, $40 savings.
6. Answers will vary — check that the “need” is essential (transportation, school costs) and the “want” is non-essential (eating out, gaming).
Disclaimer: This worksheet was generated with AI assistance based on original video content. It is intended for educational reference only. Teachers are encouraged to review and adjust questions to fit their curriculum standards before classroom use.
🎯 Extension Activity: Have students track (or estimate) one week of their own spending, sort each item into needs/wants/savings, then calculate what percentage of their actual spending fell into each category compared to the 50/30/20 target.