Budget
Primary 6 · Social and Religious Studies
Budget
Lesson 2 of 4
14 min
Habimana's family wants to buy a goat before the end of the year. His father says, "If we only spend and never plan, December will come and our pockets will be empty." So on the first day of the month the whole family sits down with a pencil and paper to make a plan. That plan is called a budget.
A budget is a plan that shows the money a person, family or organisation expects to receive (income) and plans to spend (expenditure) over a period of time, such as a week, a month or a year.
| Income | Frw |
|---|---|
| Father's wages (building work) | 90,000 |
| Selling milk | 30,000 |
| Mother's vegetable stall | 40,000 |
| Total income | 160,000 |
| Planned expenditure | Frw |
|---|---|
| Food | 60,000 |
| Rent | 25,000 |
| Mutuelle de Santé (the month's share) | 3,000 |
| School materials | 10,000 |
| Transport | 12,000 |
| Electricity and charcoal | 15,000 |
| Soap and clothes | 10,000 |
| Church, mosque and community contributions | 5,000 |
| Total expenditure | 140,000 |
Income − expenditure = 160,000 − 140,000 = 20,000 Frw. The family puts this 20,000 Frw into savings for the goat. Every franc now has a job.
| Kind | Meaning | Example |
|---|---|---|
| Surplus budget | Income is more than spending. | Income 160,000; spending 140,000. Surplus: 20,000. |
| Deficit budget | Spending is more than income. | Income 160,000; spending 175,000. Deficit: 15,000, which must be borrowed or cut. |
| Balanced budget | Income and spending are equal. | Income 160,000; spending 160,000. |
Rwandan families save in savings groups (ibimina), in the Umurenge SACCO (a savings and credit cooperative in each sector), in banks, on mobile money savings accounts, and in Ejo Heza, the national long-term savings scheme.
Tip
Earn, Plan, Save, then Spend. Put savings aside before you spend on wants, not after. Money saved "later" usually never gets saved.
Answer: A plan of expected income and planned spending for a period of time.
Answer: A surplus budget, with 20,000 Frw left.
Answer: A deficit budget, short by 15,000 Frw.
Answer: Cut spending on wants, or find extra income, for example by selling vegetables.
Answer: Any two of: ibimina, Umurenge SACCO, a bank, mobile money savings, Ejo Heza.
What you learned today
Sources and credits
The worked example is written by Ganzaa.
This lesson adapts CC BY-SA material and is shared under CC BY-SA 4.0.
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