5.2 Income and Budgeting

• Meaning of income for an individual
• Sources of income for an individual
• Meaning of a budget
• Importance of budgeting in day-to-day life
• Ways of spending money wisely
• Preparing a simple personal budget in KSh
• Ethical practices in income and budgeting
• Unethical practices in income and budgeting
• Importance of financial planning in income management

• identify sources of income for an individual
• explain the importance of budgeting in day-to-day life
• prepare a simple budget for personal financial management
• explore ethical and unethical practices in budgeting
• appreciate the importance of financial planning in income management

“Why is it important to prepare a personal budget?”

“What are the ethical issues in income and budgeting?”

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1. What income is
   40 min · 1 practice tasks · quiz
   Define income as legal money or value received, and separate it from loans, theft and rumours of being rich.
2. Sources of income
   40 min · 1 practice tasks · quiz
   Identify legal sources of income: work, business, gifts, farm and skill, at a Kenyan Grade 8 scale.
3. What a budget is
   40 min · 1 practice tasks · quiz
   Define a budget as a written plan that matches expected income to spending and a save, in KSh.
4. Why a personal budget matters
   40 min · 1 practice tasks · quiz
   Explain why preparing a personal budget protects needs, reduces waste, funds a goal and keeps peace over money.
5. Spending money wisely
   40 min · 1 practice tasks · quiz
   Describe wise spending: needs first, compare prices, refuse waste, and record where KSh went.
6. Preparing a simple personal budget
   40 min · 1 practice tasks · quiz
   Prepare a one-week personal budget in KSh that closes: income, needs, a save if possible, then wants.
7. Ethical practices in income and budgeting
   40 min · 1 practice tasks · quiz
   Explore ethical habits: honest sources, true figures, not raiding entrusted money, and keeping a promised save.
8. Unethical practices in income and budgeting
   40 min · 1 practice tasks · quiz
   Name unethical practices: illegal income, false plans, misuse of entrusted money, and gambling needs.
9. Financial planning and managing income
   40 min · 1 practice tasks · quiz
   Appreciate financial planning as a repeating cycle: know income, budget, spend wisely, record, review.