Chapter 3
Budgeting: Keeping Track of Your Money
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Check
Your
Understanding
What is the purpose of a budget?
Expenses
Expenses are amounts paid for goods or services. Do you pay for your
school lunches? Your clothes? Your cell phone? Entertainment? These are
examples of expenses.
Expenses are categorized as either fi xed or variable. Fixed expenses are
those that stay the same each month, such as amounts paid for school lunches
or bus passes. Variable expenses are those that change from month to month,
such as amounts paid for cell phones bills or spending for personal care items.
As a teen, you probably do not have many expenses beyond those for
your personal needs. However, as you graduate and go to college or your fi rst
full-time job, you will fi nd there are a lot more expenses to consider. Items
such as rent, utilities, groceries, and many other expenses will need to be
tracked. Getting in the habit of tracking your spending now will help make it
easier when your expenses are greater.
Examples of
fixed expenses for
adults would be
mortgage or rent
payments and car
payments.
Having a cell phone is a variable expense that should be included in your
budget each month.
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