1. Heart of the City SchoolstoBusiness Banking & Budgeting

2. Heart of the City SchoolstoBusiness Banking & Budgeting

6. Pre-Lesson Notes – terms introduced in the lesson:  A budget is a plan to spend, save, and invest the money you make. It helps you to keep track of how much money you earn and how much you spend.  Money you receive is called income. Money you spend is called expenses or outgoings.  If you spend more than you earn you will have a budget deficit. If you spend less than you earn you will have a budget surplus.  A current account lets you write cheques or use a debit card to pay for your purchases.  A savings account allows you to keep money in the bank and earn interest.  Online Banking allows you to view your accounts on the internet and transfer money electronically between accounts.

7. Introduction

8. Banking and Budgeting A budget is a plan for how to spend, save, and invest the money you make. It helps you keep track of how much you earn and how much you spend. Money you receive, such as what you make from a job, an allowance, or even gifts, is called income. Money you spend on school supplies, clothes, food, birthday gifts, and entertainment is called expenses or outgoings. If you spend more than you earn, you will have a budget deficit, or loss. If you spend less than you earn, you will have a budget surplus, or gain.

9. Banking and Budgeting If you have a budget deficit or loss, you won’t have enough money to pay for the things you want. You also won’t have any money to save or invest. Spending more than you earn is sometimes referred to as “living beyond your means.” If you have a budget surplus, you’ll have extra money that you can save toward buying the things that you want. When your earnings exceed, or are more than what you spend, it is known as “living within your means.” Your personal budget will help you figure out how much money you need to save each month to reach your goals. It will also help you avoid budget deficits, or losses, so that you can buy the things you want and save and invest your money in to achieve financial security.

10. Banking and Budgeting Imagine you have a part time job – you may already have some part time work - or think about yourself in a few years time. How much will you be earning each month? What will you spend it on? Complete the Personal Monthly Budget in your work book – that is, what you expect to earn and spend.

11. Banking and Budgeting A current account lets you write cheques on the money you deposit in that account or use a debit card to pay for purchases. A savings account is money kept in a bank or other financial institution on which you earn interest. Online banking allows you to view your accounts online and transfer money electronically between your current account and savings.

12. Banking and Budgeting Banks and building societies offer several types of current and savings accounts. Some types of current accounts require monthly fees for this service, while others offer “free current accounts”, typically when you maintain a minimum balance in your account. Many banks and building societies offer current accounts geared towards the needs of students. Complete the Bank Services worksheet in your work book

13. Banking and Budgeting – Optional Q&A Which students have a current account with a bank and what has been your experience? Do you have a savings account - has it helped you to make your money grow? Do you or your family members use online banking? Has the experience been positive? Why or why not? What are the risks? Why is it important to budget your TIME?

14. Notes about the Content These lesson plans have been provided as part of a collaborative project led by Heart of the City. Contributors include: Bank of America Merrill Lynch, BT, Business in the Community, City Action, City of London Corporation, Clifford Chance, Deloitte, East London Business Alliance, Heart of the City, KPMG, Linklaters, Newham Education Business Partnership, Nomura, Sapphire Systems Plc, Tower Hamlets Education Business Partnership, UBS Ltd. The lessons were developed by Miken Associates UK Limited.