Exercises: Managing money: income, expenditure, and budgeting

Classify each item in Nora's piggy bank money as income or expenditure, and within expenditure, as fixed (the same every month) or variable (changes): (a) weekly pocket money; (b) monthly bus pass; (c) a comic; (d) birthday money from her grandparents; (e) chess club membership fee; (f) popcorn at the cinema.

A lemonade stand has the following expenses: lemons, sugar, cups, ice, and the market permit (a one-off fixed cost). Classify them into fixed and variable costs, and explain what happens to each one if it rains one day and only $3$ cups are sold.

The figure shows Lucía's income and expenditure over the four weeks of a month: each green bar shows her income for that week and each amber bar shows her expenditure.

1. a) Read the total income and total expenditure for the month from the graph, and calculate how much Lucía saved.
2. b) In week $3$, she earned more than usual (she was paid for babysitting her cousin). Explain what would happen to her savings if Lucía spent that extra income as soon as she received it.

Explain the difference between income and expenses, and between a necessary expense and a non-essential one. Classify these expenses from one week: the bus fare to school, a cinema ticket, the daily afternoon snack, a $3\ \text{€}$ phone game and the materials for a compulsory school trip.

Explain what saving is and the rule 'pay yourself first' (setting the savings aside when you receive your pocket money, not at the end of the month). With pocket money of $25\ \text{€}$ a week and a saving goal of $20\ \%$, calculate how much you set aside each week and how much you will have in $10$ weeks.

Define what a budget is and name its three basic parts (expected income, expected expenses, the difference). Explain why a budget is made BEFORE the month and not after, and what is done with it at the end of the month.

A crêpe stall has these movements on the day of the fair: buying ingredients $45\ \text{€}$, selling crêpes $130\ \text{€}$, stall permit $15\ \text{€}$, initial float put in and taken back $20\ \text{€}$. Calculate the day's result (income minus expenses) and explain why the initial float counts neither as an expense nor as income.

Explain what an 'ant expense' is and find three in your own routine (or in a fictional character's): small, repeated and almost invisible. Estimate how much each one adds up to in a month and why the budget catches them better than memory.

Izan receives $40\ \text{€}$ per month in pocket money. He wants to save up for headphones costing $80\ \text{€}$. His expenses last month were: transport $12\ \text{€}$, leisure $18\ \text{€}$, snacks $8\ \text{€}$, and gifts $5\ \text{€}$.

1. a) Calculate how much he saved (or lost) last month and, at that rate, when he could buy the headphones.
2. b) Create a budget for next month that will allow him to buy them in four months: specify how much he allocates to each item and how much to savings.

The stall at the fair will sell juices at $2\ \text{€}$ a glass. The projected expenses are: fruit and glasses, $0,80\ \text{€}$ per glass, plus $20\ \text{€}$ in fixed costs for the permit and posters.

1. a) Calculate how many glasses they need to sell to break even (cover all costs).
2. b) If they expect $60$ customers, calculate the projected profit and explain what would happen if only $15$ came.

A simple budgeting rule splits income as follows: $50\ \%$ for needs, $30\ \%$ for wants, and $20\ \%$ for savings. Apply it to pocket money of $60\ \text{€}$ per month and calculate each portion. Then classify these real monthly expenses into the three categories and state whether the month aligns with the rule: bus pass $20\ \text{€}$, cinema and going out $15\ \text{€}$, school supplies $8\ \text{€}$, headphones (want) $10\ \text{€}$, savings in the piggy bank $7\ \text{€}$.

Bruno receives $50\ \text{€}$ a month. Set up his March budget with these items: transport $15\ \text{€}$, eating out $12\ \text{€}$, leisure $10\ \text{€}$, saving for a scooter $8\ \text{€}$ and unexpected expenses $5\ \text{€}$.

1. a) Check that the budget balances and explain what a 'zero-sum budget' means (every euro has an assigned mission).
2. b) The scooter costs $120\ \text{€}$ and he already has $40\ \text{€}$ saved. Calculate how many months he has left at the current pace and propose two tweaks to the budget to get it two months earlier, stating what each one sacrifices.

The school market team made its budget and reality turned out like this:

1. a) Calculate the deviation of each item and the expected profit versus the actual one.
2. b) Analyse the two main causes of the deviation and write two decisions for the next budget (estimating prices with a real delivery note, a pessimistic sales cushion).

The robotics club charges a fee of $5\ \text{€}$ a month to its $12$ members. Monthly expenses: materials $35\ \text{€}$ and the room fee $10\ \text{€}$. They want to buy a new $90\ \text{€}$ kit.

1. a) Set up the club's monthly budget and calculate how much it saves each month.
2. b) Calculate in how many months they will be able to buy the kit without touching the current budget and propose one way of buying it in half the time (a one-off extra fee, PTA sponsorship), explaining what each one involves.

Your family puts you in charge of the budget for your grandfather's birthday party: $200\ \text{€}$ for $20$ people. Split the money among food, drink, decoration and the present, justifying the percentages chosen. Then aunt Carmen announces that $5$ more people are coming: adjust the budget without going over the $200\ \text{€}$ and explain which item it cuts into and why that one and not another.

The breakfast stall sells $60$ units a day at $1,50\ \text{€}$. Costs: $0,70\ \text{€}$ of ingredients per breakfast and $25\ \text{€}$ fixed weekly costs (permit and sign).

1. a) Calculate the revenue, costs and profit of a $5$-day week.
2. b) The team wants to donate $100\ \text{€}$ a week to the neighbourhood NGO: calculate how many more daily breakfasts it would need to sell to keep its own profit after the donation, explaining your reasoning.

Checking her card statement, Laia discovers her "phantom spends" (small, regular expenses): white coffee on the way to school ($1,50\ \text{€}$ almost daily), vending machine snacks ($1\ \text{€}$ about $3$ days a week), and subscriptions she no longer uses ($6\ \text{€}$ a month).

1. a) Calculate the total of these phantom spends over a school year of $40$ weeks.
2. b) Propose a plan to reduce them by half without giving everything up (what she cuts, what she replaces, and how much she would save per year).

The end-of-year school trip has a budget of $150\ \text{€}$ per person. The proposed costs are: coach $40\ \text{€}$, hostel $60\ \text{€}$, activities $45\ \text{€}$, and trip t-shirt $20\ \text{€}$.

1. a) Calculate how much they go over budget and what percentage this excess represents.
2. b) Prioritise the costs (essential, important, non-essential) and propose two specific cuts to keep the trip at $150\ \text{€}$, justifying what is lost with each cut.

The market team budgeted $80\ \text{€}$ in expenses and ended up spending $95\ \text{€}$: the price of fruit went up ($+10\ \text{€}$) and they had to reprint posters with the corrected date ($+5\ \text{€}$).

1. a) Calculate the total budget variance in euros and as a percentage, and break it down by cause.
2. b) Explain what two decisions you would make for the next market: one regarding how to estimate prices and another regarding a financial buffer for contingencies (how much and why).

Mia is tracking her money for the first time: she notes everything down for a month and discovers she spends $22\ \text{€}$ on eating out, $9\ \text{€}$ on subscriptions (two apps she barely opens), $14\ \text{€}$ on transport and $10\ \text{€}$ on leisure, out of $60\ \text{€}$ of pocket money.

1. a) Set up her actual monthly statement, calculate the saving achieved and the percentage of her pocket money each expense represents.
2. b) Design her budget for the following month with the $50/30/20$ rule adapted to her real life, stating which expense you tackle first and why the subscriptions are the obvious candidate.

The end-of-year trip budgeted $45\ \text{€}$ per pupil for $35$ pupils. When closing the accounts: the coach went up $80\ \text{€}$ because of fuel, $3$ pupils pulled out (no longer refundable: $135\ \text{€}$ of their places lost) and the hostel discounted $50\ \text{€}$ for being a large group.

1. a) Calculate the initial total budget and the total actual spending, and the deviation in euros and percentage.
2. b) Decide how to share out the deviation (absorbing it with the class fund, charging a supplement, cutting a $60\ \text{€}$ activity) and defend your option both to those who pulled out and to those going.

'Making budgets is living obsessed with money; better to spend sensibly and leave it at that.'

1. a) Summarise what the statement defends and what truth it has (an obsessive budget also spoils life).
2. b) Rebut it with a case: a family with $1.400\ \text{€}$ a month that 'spends sensibly' without noting anything down and discovers in December there is nothing left for the heating. Explain what would have changed with a simple three-item budget and propose a reasonable middle ground (a light $15$-minute monthly budget).

The school's charity market handles $800\ \text{€}$ in cash in a single day. Design the till control system: how much initial float and who signs for it, how each sale is noted (or each withdrawal of excess cash), who looks after the money in shifts, how the till is closed between two people, and what is done if the count doesn't match the sales noted. Explain why these controls also protect whoever handles the money.

Your cooperative had a first term with these figures: September, losses of $35\ \text{€}$ (initial purchase); October, profit of $60\ \text{€}$; November, profit of $85\ \text{€}$.

1. a) Calculate the accumulated result for the term and the average monthly profit of the two good months.
2. b) The team is debating what to do with the money: sharing it among the $8$ members, reinvesting it in more stock or creating a fund. Calculate how much each member would get if everything is shared out and defend one of the three options with the project in mind a year ahead.