Personal Financial Management Unit Standard
Student Workbook
Balancing
your budget
US 28094
Produce a balanced budget and adjust the budget
to reflect changing financial circumstances
Level 2 | Credits 3 | Version 1
Name:
Instructions
Welcome to this workbook about budgeting, which contains the content
knowledge you need to meet NZQA Personal Financial Management Unit
Standard 28094.
This workbook will assist you with learning how to produce a balanced budget and adjust
the budget to reflect changing financial circumstances. You will learn about the different
components of a budget and a range of different budget formats. The workbook will guide
you through the importance of reviewing budgets regularly and the need to adjust them to
reflect changes in household income and expenditure. As the needs of a household changes,
their budget will also need to change. You will also learn about the importance of setting goals
that are SMART – specific, measurable, attainable, relevant and time–bound.
The workbook contains content notes to cover all requirements of this unit standard.
There are a range of activities and tasks for you to complete as practice and to help consolidate
your understanding. Your teacher will provide you with the necessary guidance to help you
complete these successfully. Some of these tasks will require you to complete individual
research using the internet, either at school or at home. Your teacher may set some of these
activities as homework tasks.
US 28094 v1 Student Workbook
2
CONTENTS
Balancing
your budget
Outcomes and evidence requirements
1. About budgeting
1.1 What is a budget?
1.2 Who should have a budget?
1.3 Purpose of a budget
1.4 A balanced budget
1.5 Household budgeting 4
6
6
6
7
7
8
2.Goals
2.1 Setting goals
2.2 Length of goals
2.3 Setting SMART goals 11
11
11
12
3. How to make a budget 3.1 Preparing your budget
3.2Accuracy
3.3 Determining your current position
3.4 Payments and expenses
3.5 Spending periods
3.6 Income 3.7 Budget surplus
3.8 Budget deficit
3.9 Budget time period
3.10 Budgeting tools for you
and your household to use
15
15
16
16
17
18
19
19
20
20
22
4. Reviewing or monitoring your budget
over time
4.1 If your budget is in “deficit”
23
23
5. Practice assessment 5.1 Answers to practice assessment
26
31
Sources
35
US 28094 v1 Student Workbook
3
Outcomes and
evidence requirements
Outcome 1
Produce a balanced budget and adjust the budget to reflect changing
financial circumstances.
Evidence requirements
1.1 A balanced household budget is produced to show current financial circumstances.
1.2 Household budget is reviewed and adjusted to reflect changing financial circumstances.
Range: Review includes:
››
frequency of reviews, comparing budget with actual receipts and payments;
››
changing financial circumstances may include changes in goals and/or priorities;
››
evidence of two changes to financial circumstances is required.
1.3 The adjustments to the budget are explained in terms of how they meet the needs
of the household’s changing financial circumstances.
Achieved, Merit, or Excellence
This unit standard can be awarded with Achieved, Merit, or Excellence.
Criteria for Achieved
You must:
››
demonstrate the ability to produce a balanced budget and adjust the budget to reflect
changing financial circumstances
Criteria for Merit
You must provide:
››
an explanation of the adjusted budget which includes links between adjustments
and changing financial circumstances
Criteria for Excellence
You must provide:
››
an explanation of the adjusted budget which includes a justification of how the
adjustments accommodate the changing financial circumstances
US 28094 v1 Student Workbook
4
Definitions
››
A balanced budget balances receipts with payments and includes a plan to monitor its
accuracy over time.
››
A household budget is prepared for a situation that is typically characterised by:
››
›
relevance to several people of the same family/whānau and/or living in the
same household
›
need to balance different goals and priorities
›
multiple sources of income and/or receipts
›
multiple commitments including shelter, food, utilities, clothing
›
need to reflect changing circumstances and/or priorities
›
creation of an emergency fund for unexpected expenses
›
provision for ‘uneven’ income or expenditure circumstances
Goals must be SMART (specific, measurable, attainable, relevant, time-bound).
US 28094 v1 Student Workbook
5