1. Warm Up
On a separate sheet of paper, what are some things that you have bought recently?
Are these things needed or wanted?
What kind of things do your parents buy?
Are these needs or wants?

2. Managing Scarce Personal Resources
Are scarce personal resources money?

3. Overview
Students will understand the purpose of a budget, what needs be included in a budget, and how to balance the budget.

4. Objective Students will: Practice creating a budget
Learn and demonstrate an understanding that there is a cost to every financial decision - the concept of Opportunity Costs

5. Needs vs Wants?
What are needs and wants?

6. You Spent What?!?

7. Chew on this!
If you worked 10 hours a weeks at $7.25 an hour, how many hours would it take you to earn these items? Is it worth the time?

8. Budget
What a budget is?
A budget is an estimate of income and expenditure for a set period of time
What kinds of things are included in a budget?

9. Why budget to donate money?
Currently, you live in an apartment, with a roommate. They share the rent, utilities, water, and cable/internet with their roommate.
You do save a small amount towards college loan because you have already paid down most of their college debt.
You each drive a midrange 4-door car (like a VW, or Toyota) that you are about to pay off because it is 6 years old.
Your car insurance is with an average rate company.
You only have to drive 10 miles a day to and from work so their monthly gas expense is not as large as it is for some.
Your health insurance is covered by your job. You must pay a co-pay every time you visit the doctor
Remember, you are young, single and recent college graduates.
You do not have a home phone, just a cell phone.

10. Miscellaneous is a the category for all of the necessary things that don‘t happen every month like
oil changes
birthday presents
Mother‘s and Father‘s Day presents
Prescriptions
Shampoo
toilet paper
haircuts
etc.
This includes almost everything that isn‘t a need in the fun category, even eating out.

11. BUDGETING ACTIVITY
In pairs, you are to create a budget using the expenditure sheet provided on page 30.

12. Budgeting Planning Worksheet
You will receive a paycheck of $1,000 before deductions twice a month.
After taxes, you take home $825.
That is what you get to take home every month, no more, and no less.
Categories in the budget:
Savings Category and a Donations Category… Why?
Pay Yourself First.
What is a savings account for?
Emergencies,
College
A house
Retirement or Vacations.

13. Is any money left?
If you are over budget, you will need to adjust and/or cut out certain amenities.
On the Budget worksheet, subtract each category‘s actual amount from their paychecks.
Examples of expenses:
Rent - $600.
Utilities - $150.
Groceries - $200
Personal Care - $40
Clothing - $75 (Shirt, Pants, Shoes)
Car Insurance - $70
Gas for Car - $75
Health Insurance - $35.
Cell Phone - $80
School Loans - $200
School Supplies - $125
Miscellaneous - $25
Total Income per month- $1650

14. Look for suggestions such as:
If you should leave money in their checking accounts, should you put that money into savings, or have more fun?
Look for suggestions such as:
The extra money creates a buffer of in your account so you don‘t have to worry about overdraft fees or running out of money.
Always allows for flexibility in your budget – when bills change from month to month, having extra money in your budget will allow you to cover the variables such as utilities, gas, water, ripped dress pants, an extra box of mac and cheese, cold medicine, etc

15. Discussion What are some things that you regularly spend money on?
Are they needs or wants?
How often do they spend money on those items?
How much would they save if they cut the frequency in half?