Financial Literacy · Foundation
How to make a budget, step by step
A budget is a plan for your money: what comes in, what goes out and what is left. It helps avoid debt and reach goals.
- Ages
- 14+ (rough guide)
- Level
- Foundation
- Subject
- Financial Literacy
- Time
- 25 minutes
- Format
- Online + printable
- 1Learn it
- 2See it worked
- 3Try it online
- 4Print it
- 5Check your answer
Before you start
Who it's for and what to know first
Adding and subtracting money.
- Income: take-home pay, benefits, other regular money in.
- Fixed costs stay the same each month: rent, council tax, phone contract.
- Variable costs change: food, energy, transport, fun.
- Surplus = income − all costs. If negative, it is a deficit: cut variable costs first.
- Pay yourself first: move savings on payday, before spending.
- Look at three months of bank statements to find your real spending.
Worked example 1
Income £1,600. Rent £700, council tax £120, phone £20, food £250, energy £110, transport £90. What is left?
- Fixed: 700 + 120 + 20 = £840.
- Variable: 250 + 110 + 90 = £450.
- Total costs £1,290.
- 1,600 − 1,290 = £310.
Answer: £310 surplus
Try it online · print it · check it
Practice questions
Foundation · ages 14+
Making a budget
NameDate
Answer each budget question.
- 1.Is rent a fixed or variable cost?
- 2.Is food shopping fixed or variable?
- 3.Income £1,200, costs £1,050. Surplus?
- 4.Income £900, costs £980. Is that a surplus or deficit?
- 5.Save 10% of £1,500 take-home pay. How much?
Answer each budget question.
- 1.Is rent a fixed or variable cost?fixed
- 2.Is food shopping fixed or variable?variable
- 3.Income £1,200, costs £1,050. Surplus?£150
- 4.Income £900, costs £980. Is that a surplus or deficit?deficit
- 5.Save 10% of £1,500 take-home pay. How much?£150
- Forgetting yearly costs such as TV licence or car MOT — divide them by 12.
- Forgetting yearly or irregular costs, such as car insurance or birthdays. Divide them by 12 and include them monthly.
Last reviewed: 25 September 2026
