1. R. Delaney
CHAPTER 3 BUDGETS:
Preparing a Budget

2. R. Delaney
Preparing a Budget
The following should be kept in mind when preparing a budget:
A budget surplus happens when the planned income is greater than the planned expenditure.
A budget deficit happens when the planned expenditure is greater than the planned income.
Net cash is the difference between total planned income and total planned expenditure.
Opening cash is the amount of money a family plans to have at the start of a month or period.
Closing cash is the planned net cash plus the planned opening cash.

3. Figures from pages 17 and 18 in textbook
R. Delaney
Figures from pages 17 and 18 in textbook
BLACK FAMILY BUDGET
Jan Feb March April Total J to A
PLANNED INCOME € € € € €
The totals for January to April are calculated by adding together the individual amounts for each of the 4 months. For Brian’s salary it is €3,700 + €3,700 + €3,770 + €4,500 = €15,600
Brian Black -- Salary
3,700
3,700
3,700
4,500
15,600
Bernie Black -- Salary
3,500
3,800
3,500
3,500
14,300
Child benefit
180
180
180
180
720
Interest on savings
300
300
TOTAL INCOME (A)
7,380
7,680
7,380
8,480
30,920
PLANNED EXPENDITURE
Fixed
Mortgage
1,800
1,800
1,820
1,820
7,240
Car insurance
500
500
House insurance 50 50 50 50
200
Subtotal
2,350
1,850
1,870
1,870
7,940
Irregular
Household expenses
2,000
2,000
2,000
1,500
7,500
Heat and light
250
1,000
200
1,450
Telephone 80
230 80
260
650
Car running costs
260
260
260
260
1,040
Subtotal
2,590
3,490
2,540
2,020
10,640

4. Budget continued Discretionary Jan Feb March April Total J to A
R. Delaney
Budget continued
Discretionary Jan Feb March April Total J to A
Birthdays
150
200
350
Holidays
500
700
1,000
2,200
Entertainment
400
400
400
250
1,450
Subtotal
900
550
1,300
1,250
4,000
TOTAL EXPENDITURE (B)
5,840
5,890
5,710
5,140
22,580
TOTAL INCOME (A)
7,380
7,680
8,480
30,920
Net cash = A - B
1,540
1,790
1,670
3,340
8,340
Opening cash
500
2,040
3,830
5,500
500
Closing cash
2,040
3,830
5,500
8,840
8,840
Total expenditure each month is calculated by adding the 3 subtotals together