Grade 12 Budget Planning Worksheet

Budget Planning and Financial Goals

Read each question carefully and provide thoughtful, detailed answers. Show your work where applicable.

Understanding Income and Expenses

1. Define the following terms in your own words:

a. Gross Income:  

b. Net Income:  

c. Fixed Expenses:  

d. Variable Expenses:  

2. Which of the following is typically considered a fixed expense?

3. The primary purpose of creating a budget is to:

4. Sarah earns a gross monthly income of $3,500. Her deductions for taxes and benefits amount to 20% of her gross income. Her fixed expenses include rent ($1,200), car payment ($300), and student loan payment ($250). Her variable expenses typically include groceries ($400), utilities ($150), and entertainment ($200).

a. Calculate Sarah's net monthly income.

b. Calculate Sarah's total fixed expenses.

c. Calculate Sarah's total variable expenses.

d. Does Sarah have a surplus or deficit each month? By how much?

5. True or False: It is generally recommended to allocate at least 10% of your net income to savings.

6. True or False: A budget should be reviewed and adjusted periodically.

7. Imagine you are planning for your financial future after high school. Describe one short-term financial goal (within 1 year) and one long-term financial goal (5+ years). For each goal, explain how you would incorporate it into your budget and what steps you would take to achieve it.