Budgeting: The Power of a Simple Plan

Lexile: 910 | Grade: 7

Passage

Imagine getting $50 each month to spend however you want. At first, it may seem like a lot. But after one trip to the mall, it's gone. This is where budgeting becomes important.

A **budget** is a plan that helps people manage their money. It shows how much money is coming in (called income) and how much is going out (called expenses). A good budget helps make sure you don’t spend more than you earn.

There are different kinds of expenses. Some are **needs**, like food, rent, and transportation. Others are **wants**, like video games, designer shoes, or extra snacks. A budget helps people make smart decisions between needs and wants.

For example, imagine Maya earns $80 a month from babysitting. She spends $20 on school lunches and $30 on saving for a laptop. That leaves $30. Instead of spending all of it, she decides to save $15 for future needs and use the rest for fun. Maya is creating a habit of **financial responsibility**.

Budgets aren’t just for kids. Families use them to pay bills and save for emergencies. Governments use budgets to decide how much money should go to things like schools, roads, and hospitals. Even businesses use them to stay profitable.

Learning to budget is like learning to drive. At first, it takes practice and attention. But once you get the hang of it, it gives you control—and freedom.

Questions

Q1: What is the main idea of the passage?

A. Earning money is harder than it seems.
B. Budgets are only useful for adults with jobs.
C. A budget is a tool to help manage money wisely.
D. Maya spends all her money on food and games.

Q2: How does the author organize the information in the passage?

A. By comparing different types of government budgets
B. By using a cause and effect format
C. By providing a definition followed by examples
D. By telling a fictional story about Maya’s life

Q3: Why is Maya described in the passage?

A. To show that budgeting is only for kids
B. To prove that babysitting pays well
C. To provide an example of responsible budgeting
D. To explain how to earn money from babysitting

Q4: What can be inferred about people who don’t use budgets?

A. They always save too much money.
B. They are better at managing their income.
C. They might overspend and run out of money.
D. They never go shopping or eat out.

Q5: What does the author most likely mean by comparing budgeting to learning to drive?

A. Budgeting is only for people who drive.
B. Budgeting is fun and dangerous like driving.
C. Both take practice at first but lead to independence.
D. Driving requires a budget for car payments.

Q6: Which of the following would be considered a 'want' based on the passage?

A. School lunches
B. Bus fare
C. Designer shoes
D. Rent payments

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Answers & Reasoning

Q1: What is the main idea of the passage?

✅ Correct Answer: C

💡 Reasoning: The passage defines budgeting and explains how it helps people make smart financial decisions.

Q2: How does the author organize the information in the passage?

✅ Correct Answer: C

💡 Reasoning: The passage begins by defining budgeting and then uses a clear example (Maya) to show how it works.

Q3: Why is Maya described in the passage?

✅ Correct Answer: C

💡 Reasoning: Maya’s story is used to demonstrate how budgeting works and how to separate needs, wants, and savings.

Q4: What can be inferred about people who don’t use budgets?

✅ Correct Answer: C

💡 Reasoning: The passage explains that budgets help avoid overspending, so not using one could lead to financial trouble.

Q5: What does the author most likely mean by comparing budgeting to learning to drive?

✅ Correct Answer: C

💡 Reasoning: The metaphor suggests that budgeting, like driving, gives people control after they learn the basics.

Q6: Which of the following would be considered a 'want' based on the passage?

✅ Correct Answer: C

💡 Reasoning: The passage defines 'wants' as non-essential expenses like designer shoes or extra snacks.