Beginner level · Module 2: Payroll and Budget Preparation · Lesson 3 of 3
Building a Monthly Budget
Plan income and spending for the month ahead.
In this lesson you will
- Structure a budget by line
- Estimate income and costs realistically
Key concepts
budgetbudget linesestimatescontingency
The lesson
A budget is a plan of expected income and expenses for a period, organised by lines such as sales, rent, salaries, transport and supplies.
Base estimates on past records, known prices and planned changes. Note the assumption behind each line.
Add a small contingency for unexpected costs, and compare actual results with the budget every month.
Step by step
- List income and expense lines.
- Estimate each from past records.
- Note assumptions.
- Calculate the expected surplus or deficit.
Practice activity
Build the monthly budget for the organisation.
Expected result: A budget with documented assumptions and a contingency line.
Check your understanding
-
What is a budget?
Show answer
A plan of expected income and expenses for a period.
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Why note assumptions?
Show answer
So estimates can be checked and updated.
Taught live by an instructor — online or in person. Free course lessons are for self-study and do not lead to a certificate — see registration options.