F. Financial Literacy · Money and Finances: Exchange Rates, Budgets, Financial Decisions and Interest

Tracking and Adjusting a Budget

F1.3 A1About 45 minutes

Learning goals

I can track planned and actual income and spending.
I can find the difference between what I planned and what happened.
I can keep a running balance of my savings.
I can adjust a budget when things change and still reach a goal.

Words to know

track
To record every amount of money that comes in and goes out.

planned (budgeted) amount
The amount you expected in your budget.

actual amount
The amount that really happened.

difference (variance)
Actual minus planned. It shows if you went over or under.

running balance
The total in an account after each deposit or withdrawal is added or subtracted.

adjust
To change a budget so it fits what is really happening.

A budget is a plan, not a promise

Kai's laptop budget from last lesson looked perfect on paper: $100 income and $50 saved every month. But in October, the family Kai babysits for went away for two weeks, and Kai went to a friend's birthday party. At the end of the month Kai checked the savings jar. Uh-oh.

Plans meet real life. That's why we track what really happens and adjust the plan.

How to track

Pick a tool you'll actually use:

A notebook ledger: date, what, money in, money out, balance.
A spreadsheet (with a grown-up): it can add the columns for you.
A budgeting app (with a grown-up's permission).
Envelopes or jars for each part of the budget.

At the end of each month, compare planned with actual:

Difference = actual − planned

For expenses, a positive difference means you spent more than planned (over budget). For income, a negative difference means you earned less than planned.

October	Planned	Actual	Difference (actual − planned)
Income	$100	$85	−$15 (earned less)
Snacks	$20	$32	+$12 (over)
Fun with friends	$15	$10	−$5 (under)
Gifts	$10	$25	+$15 (over)
Giving	$5	$5	$0
Total expenses	$50	$72	+$22
Savings (income − expenses)	$50	$13	−$37

Kai's October: planned compared with actual.

Kai's October, planned (dashed) beside actual (filled), in dollars. Income came in lower and snacks and gifts ran higher, so savings shrank from $50 to $13.

Worked example

Example 1: What happened to Kai's savings?

Use the table. Why did Kai save only $13 instead of $50?

Actual expenses: 32 + 10 + 25 + 5 = $72.
Actual savings: 85 − 72 = $13.
Two things hurt: income was $15 less, and expenses were $22 more (mostly snacks and a birthday gift). 15 + 22 = 37, and 50 − 37 = 13 ✓

Kai saved $37 less than planned: $15 from lower income and $22 from extra spending.

Worked example

Example 2: A running balance

Kai's laptop fund starts at $0. Sept: +$50. Oct: +$13. Nov: +$50. Dec: +$50, but Kai takes out $20 for a holiday gift. What's the balance after each month?

Sept: 0 + 50 = $50.
Oct: 50 + 13 = $63.
Nov: 63 + 50 = $113.
Dec: 113 + 50 − 20 = $143.

After 4 months, Kai has $143. The plan expected 4 × 50 = $200, so Kai is $57 behind.

Kai's actual balance (solid) falls further below the plan (dashed) after October's slip and December's $20 gift. By December the fund is $57 behind.

Worked example

Example 3: Adjust to stay on track

Kai needs $600 and has $143 with 8 months left. How much must Kai save each month now? Is that possible on $100 income?

Still needed: 600 − 143 = $457.
Per month: 457 ÷ 8 = 57.125, so round up to $58.
That's $8 more than the old $50. Options: cut snacks from $20 to $12 (saves $8), or earn $8 more, or keep $50 a month and move the deadline.

Kai needs $58 a month. Cutting snacks to $12 makes the budget work: 58 + 12 + 15 + 10 + 5 = 100 ✓

Worked example

Example 4: Moving the deadline instead

If Kai keeps saving $50 a month, how many more months are needed to get from $143 to $600?

Still needed: $457.
457 ÷ 50 = 9.14, so round up to 10 months.
Check: 143 + 10 × 50 = 643 ≥ 600 ✓ (and 9 months gives 593, not enough).

10 months, which is 2 months later than the original deadline. Kai and a parent can decide which adjustment fits best.

Track small spending

Small amounts are easy to forget: $2.50 here, $4 there. But they add up! Write down every amount, or keep receipts in an envelope and record them once a week.

Looking at numbers without guilt

Going over budget can feel bad. Try to look at your tracking like a scientist looking at data: "What happened? What will I try next month?" Every month you track, you get better at planning.

Just for fun

Kai's snack spending went $12 over budget in October. Somewhere, a bag of chips is feeling very proud of itself.

Hands-on activity

Two-week money tracker

You need: a notebook or a spreadsheet (with a grown-up), a pencil and a calculator.

Make columns: Date, What, Money in, Money out, Balance.
Write your starting balance (real money you have, or a pretend $40).
For two weeks, record every amount you get or spend (if you don't spend money, track a pretend budget a grown-up gives you, or track family grocery receipts with permission).
Update the balance after every line.
At the end, make a planned vs actual table for your categories and find each difference.
Write one adjustment you'll make for the next two weeks and why.

What to look for: every balance follows from the line above it, differences calculated as actual − planned, and an adjustment linked to what the data showed.

Your turn

Planned snacks: $20. Actual: $27. What is the difference? Over or under?

Planned income: $80. Actual: $95. What is the difference?

Start: $40. Earn $25, spend $12, spend $8. What is the running balance after each step?

Income $90, actual expenses $64. How much was saved?

Goal $500. Saved so far $230. 6 months left. How much per month now?

Name two tools you could use to track a budget.

More practice: warm-up

Planned $15, actual $10. Difference?

Planned $30, actual $30. Difference?

Balance $60, then spend $18. New balance?

Balance $25, then earn $15. New balance?

What does track mean in budgeting?

More practice: on your own

Planned: income $120; expenses $70; savings $50. Actual: income $110; expenses $84. What were actual savings, and how far off plan?

Goal $750. After 5 months at $60 a month, how much is saved and how many months at $60 are still needed?

A bike repair costs $45 unexpectedly. Your savings are $210. Your goal is $400 in 5 months. If you pay for the repair from savings, how much per month do you now need?

Find the error in this ledger: Start $50 → earn $20 → $70 → spend $15 → $65 → spend $10 → $55.

Your snack spending was over budget 3 months in a row by $8, $10 and $12. What's the average overage, and what adjustment could help?

Challenge

Mira wants $900 by June. It's now September (10 months, Sept through June). She saved $70 in Sept, $55 in Oct and $90 in Nov. How much must she average for the remaining months?

A family budgets $800 a month for groceries. Over 3 months they spent $845, $870 and $812. By how much were they over in total? If prices stay this high, what new monthly grocery budget makes sense?

Kai is 10 months into the laptop plan and has $520. The laptop now goes on sale for $560 (tax included). Kai still saves $50 a month. When can Kai buy it, and how much will be left over?

Check your understanding

Quiz

Planned spending: $25. Actual: $31. What is the difference?

Balance $80. Spend $12, earn $20, spend $30. What's the final balance?

Goal $600, saved $240, 9 months left. How much per month?

Which is not a good way to adjust a budget that keeps going over?

$457 is still needed and you save $50 a month. How many months?

Why track actual spending, not just the plan?

For parents and teachers

Big idea: This lesson finishes F1.3: students track actual amounts against a budget and adjust it to still meet a longer-term goal. Running balances also practise integers and decimals.

Common difficulties:

Sign of the difference: use actual − planned consistently, then say in words whether it's over or under.
Running balance errors: one wrong line changes everything after it. Check each line.
Rounding months down: always round up when you need enough money.
Discouragement after an over-budget month. Treat it as data, not failure.

How to help: Try the two-week tracker together. If you're comfortable, show how you check a bill or bank statement for surprises. All numbers here are examples. This lesson also builds A1 skills: managing feelings about setbacks and persevering toward a goal.