1. Budget – A plan for earning, saving, borrowing and spending.
Introduce the unit… Identify the main objective of the unit, which is that the student will understand and know how to budget wisely.
Start a discussion with students about living expenses.
Have them brainstorm about:
The kind of car they would like to drive
Where they would like to vacation
What kind of house would they would like to live in, and where they would like that house located
Talk briefly about the costs of some of these choices.
Also discuss ‘wants’, and the costs of them
Cell phone
Gasoline for car
Clothing
Entertainment
Fast food
Discuss income...
Give each student a copy of the “Show me the Money” handout, and have them consider things they do and do not like to do to help them consider sources of income.
PERSONAL BUDGETING

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3. BUDGETING Explain the Reasons to Track Income & Spending
Understand the concept of Pay Yourself First
Explain why and how budgets are used in financial planning, and the reasons to track income and spending.
BUDGETING
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Key Terms
Expenses
Income
Budget
What you spend money on
Any money you receive
A plan for managing your money during a given period of time.
These terms are presented in this lesson:
Expenses – what you spend money on
Income – any money you receive
Budget – a plan for managing your money during a given period of time.
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5. Reasons to Track Income and Spending
Ask students why they should track income and spending if they have a budget. Discuss their answers. Then write the three main reasons on the board from the next slide for them to copy and explain each one.
Give each student a copy of the Budgeting Basics handout. Give students a few minutes to fill it out or consider it, then work through the scenarios together as a class. Guide students through the process to analyze the elements of the budget in the scenario.
BUDGETING
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6. Reasons to Track Income and Spending
Do you spend more than you make?
Spending and saving is about lifestyle choices.
Make sure your spending is in sync with your income
Learn to evaluate your cash flow
Understanding your financial situation can help you to get the best rates for paying off debts and for saving.
Make informed decisions about what to do with your money
Spending habits – the choices you make
If your goals include taking a vacation or going to school, you need to know today so you can make plans
Understand what you need to do to achieve future goals.
Reasons to Track Income and Spending
To ensure that your spending is appropriate for your income
Do I spend more than I make? Spending and saving is really all about choices – if you can understand the effects of your choices on your budget, then it is much easier to make changes to your behavior to reach your goals and meet your budget.
To make informed decisions on what to do with your money
It is necessary to be able to evaluate your cash flow to ensure that it is working for. Understanding your financial situation can help you achieve things like the best interest rate for paying off debt and saving for the future.
To understand what you need to do to achieve future goals.
One of the important outcomes of understanding your spending habits is how the choices you make today affect your goals of tomorrow. For example, if one of your goals is to take a vacation in six months or go back to school in a year, you need to know today if you are setting yourself up financially to be able to achieve those goals tomorrow.
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7. Understand the concept of Pay Yourself First
Discuss with your students that the Pay Yourself First concept says whenever you receive money, you should immediately put a certain amount into an account that you will set aside to use later to meet a long-term financial goal.
Discuss with students a common percentage base for long-term saving is 10% of your weekly income, which must be put into savings and ‘forgotten’ until needed or until a long-term goal is reached.
Discuss the results as a class.
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Think about the consequences of spending and saving behaviors by predicting how much was saved or spent for various situations on the Budgeting Basics handout scenarios.
Distribute the “Create a Personal Budget” handout – one per student. Help students create a monthly budget to make financial goals that fit their needs (current or future). If students are not employed, utilize this handout as a guide for students to create a future budget based on their desired occupation/career.
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