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Budgeting and Consumer Math

5 min readGrade 6 · Financial Literacy

You get a $20 allowance. You want a new game for$ 15. You also spend $5 on snacks each week. Can you save for the game? How many weeks will it take? These are the questions of personal finance.

Income, expenses, and savings

Income is money coming in (allowance, job, gifts). Expenses are money going out (food, entertainment, necessities). Savings = income − expenses. A budget lists expected income and expenses so you can plan ahead.

Budgeting

Create a simple budget: 1. List income sources. 2. List planned expenses. 3. Calculate surplus (more income) or deficit (more expenses). 4. Adjust to balance, or plan to save the surplus. Budgets help avoid overspending.

Consumer math: discounts, tax, and value

Discount: If a $20 shirt is 25% off, you save 0.25 ×$ 20 = $5, so you pay$ 15. Sales tax: If the item costs $15 and tax is 8%, the final price is$ 15 × 1.08 = $16.20. Comparing prices: Is a 20 oz bottle for$ 3 or a 16 oz bottle for $2 the better value? (First:$ 3÷20= $0.15 per oz; second:$ 2÷16≈$0.125 per oz. The second is cheaper per oz.)

KEY VOCABULARY

Income — Money coming in from work, allowance, or other sources.

Expense — Money going out for necessities or wants.

Budget — A plan showing expected income and expenses.

Discount — A reduction in price, often expressed as a percentage.

Sales tax — A percentage of the purchase price added to the total cost.