Post on 15-Oct-2020
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8GRADE
Personal Budgeting 101
In this lesson, students learn the fundamentals of budgeting. The action in the lesson includes tracking income and spending using a journal, the design and use of a simple budget template, and the application of a financial planning tool to save for future goals and expenditures. This lesson focuses on foundational budgeting skills at each stage of life.
Subject Mathematics
Suggested Timing 40 minutes
Financial Literacy Objectives
At the end of this lesson, students will be able to:• recognizethatindividualsareresponsiblefor theirfinances;
• identifyage-appropriatefinancialgoals;• createabudget.
Curriculum Expectations
Mathematics, Grades 1-8 (2005) Mathematics
Number Sense and Numeration• Solvemulti-stepproblemsarisingfromreal-lifecontextsandinvolvingwholenumbersanddecimals,usingavarietyoftools(e.g.,graphs,calculators)andstrategies(e.g.,estimation,algorithms).
• Solveproblemsinvolvingpercentthatarisefromreal-lifecontexts (e.g.,discount,salestax,simpleinterest).
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GRADE 8Personal Budgeting 101
Assessment Collect:budgettemplates
What You Need • Chartpaper• Markers• Computerlab(optional)• HowSpendingPatternsChangeThroughoutOurLives(AppendixA)• BudgetJournalWorksheet(AppendixB)• PersonalBudgetExemplar(AppendixC)• PersonalBudgetWorksheet(AppendixD)• Spreadsheettemplateorspreadsheetprogram(optional)
Minds On DistributeHowSpendingPatternsChangeThroughoutOurLives(AppendixA).
BrainstormingAskstudentstocomparevariousitemsthatpeoplearelikelytospendmoneyonateachstageoflife(children,teenagers,youngadults,adultsandseniors).
Askforvolunteerstosharetheirideasbyrecordingitemsonchartpaper. Alternately,havevolunteerswritethisinformationunderlifestageheadingson theboard.
Explainthateachlifestageincursdifferentkindsofexpenses.Emphasizetheonefactorcommontoalllifestages:theneedtocontrolandanalyzespendingtoensuretheincomewebringinadequatelycoversourcostsoflivingandotherexpenditures.
Takeaclasspolltodeterminethenumberofstudentswhoconsistentlyrecordorwritedowneverythingtheyspendmoneyon.Additionally,askifthereareanystudentswhoalreadyuseabudgettohelpthemcontroltheirspending.Forthosestudentsthatdotrackspending,enquireabouttheirprocess.
Metaphor StrategyStudentslikelyfeelthatcreatingandmaintainingabudgetisaboutasenjoyableasatriptothedentist.Tellthemthatthisisnormal,andremindthemthatevidencesuggestspeoplewhoattendtotheirteethhavebetterhygieneandoverallhealth.Likewise,peoplewhoattendtotheirfinancesbycreatingabudgetandkeepingtrackofspendingareinabetterpositiontomakedecisions,toplanforthefuture,andtoexperienceasenseofsecurity.
Explaintostudentsthatinordertolivealifethatisbalancedandfinanciallystable, itiscriticaltobeawareandincontrolofwhatiscominginandgoingoutoftheirbankaccounts.Thisisnotsomethingtofear;rather,itisaskillthatwillempowerthemtoreachtheirgoalsandachievefinancialstabilityandsuccess.
Explainthatthepurposeofthislessonistoshowstudentsabudgetingprocesstheycanuseandexpanduponthroughouteachstageoftheirlives.
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GRADE 8Personal Budgeting 101
Action Instruction:Describethebasicsofthebudgetingprocessbyexplainingthatthisbudgetingprocessinvolvesthreesimplesteps:1. Itemizespending–Thisstepinvolvesdocumentingwhatyouearnandwhatyouspendbyrecordingeachiteminajournalonadaily,weekly,and/ormonthlybasis,andrecognizingwhichexpensesareneedsandwhicharewants.
2.Evaluatespending–Thisstepinvolvesdeterminingwheremoneyisspentbycategorizingorgroupingexpenditures(e.g.,food,transportation,etc.)andcomparingactualexpenditurestobudgettargets.
3.Planningforthefuture–Thisfinalstepinvolveslearninghowtosetlimitsonyourspendingcategories,howtocreateaplantoaccountforanyunforeseenemergencyexpendituresandhowtoprepareforfuturegoalsordreams.
Explainthatoncethebudgetingprocessbecomesroutine,ittakesonlyafewminuteseachweektoupdateyourbudgettemplateandtostayontrackfortherestofyourlife.
Activity: Applying the Steps in BudgetingInputincomeandspendinginajournal.
Explaintostudentsthatthefirststepintheprocessofbudgetingistokeepajournalofalltransactions.Thisisthe“input”stageandincludesrecordingexpensesonoraroundthedatetheyoccur.Italsoinvolvesrecordinganyincomereceived.
Explainthatthisisasimpleandeasyprocessbut,likebrushingyourteethdaily,somethingthatmustbedoneonaregularbasissothatitdoesnotbecomeanoverwhelmingburden.
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GRADE 8Personal Budgeting 101
Action(continued)
ModellingModeltheinputstepbyopeningupashoeboxorwalletcontainingavarietyofreceipts.Showstudentshowtorecordexpensesandincomeinajournal(AppendixB).
Makeitclearthatwhatyouarepresentingisjustonewayofjournalizing,andexplainthatindividualsmaywanttorecordincomeandexpensesinawaythatworksbestforthem.Theseprocessescaninclude:1. Keepingallreceiptsinasafeplace(ashoebox,filefolder,oronlinedatabase)andrecording/inputtinginformationintoajournalattheendofthemonth.
2.Recordingeachexpenseasithappensbywritingtheamountreceivedorspentinasmallpocketbookorjournalthatyoukeepwithyouatalltimes.
3.Usingadigitaldevicesuchasacellphonetokeeptrackofeachpurchaseasitismade.
4.Usingspreadsheetoranonlinetrackingprogramthatbreaksdownexpensesandincomeintographsandcharts.
Demonstratetostudentsdifferentfilingsystemsthatindividualsusetokeeptheirreceiptsandpaystubsorganized(e.g.,filingreceiptsinfoldersbymonthorbytypeofexpense,keepingallincomeamountsseparatefromexpenseamountsandorganizingthesebymonth;keepingjournalpapertemplateshandyforrecordingandinputtinginformation).
Usingthejournaltemplate(AppendixB),havestudentspractiseinputtinginformationfromthevariousreceiptsthatyoupullfromtheshoebox.Encouragestudentstoidentifywhetheranitemisaneedorawant.Alsohavethemrecordanyincomereceived.
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GRADE 8Personal Budgeting 101
Action(continued)
Evaluate Spending PatternsThenextstepinanybudgetingprocessistoevaluatewhatyouspentmoneyonoverasetperiodoftimebylookingcarefullyatalloftheexpensesinyourjournalandplacingthoseexpensesintocategories.
Explaintostudentsthatthesecategorieswillbedifferentforeachindividualduringthevariouslifestages.RefertotheMindsOnactivity,whichemphasizesthefactthatadultsandteenswilllikelyhavedifferentexpendituresanddifferentbudgetcategories.
Encouragestudentstoreviewtheirjournalandassignitemstocategoriesofexpense.Provideexamplecategoriesforstudentstouse,ifneeded(food,clothing,transportation,cellphone,etc.).
Defineabudgettemplatebyshowinganexemplarofacompletedbudgettemplate(AppendixC).ShowthetemplateonscreenoronaSmartBoardandhavestudentslabelallcomponentsofthetemplatetoensurethattheyunderstandthefunctionofeachsectionofthedocument.
Takeextratimetoexplainthetwocriticalbudgettemplatecategoriesthatwillassistthemthroughouttheirlivesinmakingdecisionsaboutspending.Thesecategoriesarethebudgetedamount(thelimitthattheindividualplacesonspendingforeachitemineachcategorybasedonincome)andtheactualexpenseincurredduringthatperiod.
Explainhowcomparingbudgetamountagainstamountspentwillassiststudentsinplanningincomeandexpensesovertime.
Guided PracticeHavestudentstransfertheexpensecategoriesfromtheirjournaltotheblankbudgettemplate(cellphone,food,transportation,schoolsupplies,entertainment,etc.) andthenhavethemrecordtheamountsoftheexpenseonthetemplateinthecorrectcategory.
Forthisexercise,providestudentswithabudgetamountandactualincomeamountandexplainhowtopredictincomeforagivenperiodbasedonapaystub.Helpstudentsunderstandthetiminginvolved;thatis,whenthebudgetingnumberandactualnumberarefilledoutduringthemonth.
Explaintostudentsthatastheyusethebudgettemplateeachmonth,patternswillemergeandtheywillbegintopredicthowmuchmoneytheyareearningandhowmuchmoneytheycanbudgetforineachcategory.
Showstudentshowtoaddupandcomparethebudgettotalstotheactualtotalsandexplainthesurplusanddeficitcolumns.Demonstratehowtocalculatethetotals.(SeeAppendixCforanexample.)
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GRADE 8Personal Budgeting 101
Action(continued)
Future PlanningExplainthatthefinalstepinthebudgetingprocessinvolvesdevelopingaplan.Somepeopleprefertocreateaseparatesectionforfuturegoalplanning(seeAppendixC).Iftherearecertainthingsyouwantinthefuture—gotouniversity,buyacar,orgoonavacation—itisessentialtosaveforthosethings.Whileeveryone’sgoalsandwantsaredifferent,youcanusethistooltoplanyourfinancesinordertoattainwhatyouwantorneed.
Explainhowplanningforthefutureinvolvesfiguringoutifyouhaveabudgetsurplusordeficit.Ifyouhaveadeficit,spendingmustbecutineachofthecategoriesbeforeyoucanstartsettinggoals.Ifyouhaveasurplus,youhaveanopportunitytodecidehowmuchyouwanttosaveeachmonthtowardthatgoal.Thiswillallowyoutopredicthowlongitwilltaketoreachyourfinancialaim.
Askstudentstoexperimentwithsettingagoal(e.g.,schooling,vacation,etc.).Havethemallocateanamountusingthesavingsgoalstemplateandevaluatewheretheycouldsetlimitsoneachcategoryofthebudgettoreducetheirexpensesandsaveforthefuture.
Consolidation/ Debrief
Askstudentstotrackspendingintheirjournaloveraonemonthperiod.Attheendofthatmonth,helpthemtocreateabudgetforthefollowingmonthusinganewblanktemplateorspreadsheetprogram.
Discussthefollowing:1. Howcanidentifyingneedsandwantswithineachbudgetcategoryhelpyoudeterminewherespendingcanbereduced?
2.Describetheimportanceofabudget.3.Whataretheconsequencesofrunningadeficitbudget?4.Whenyouheargovernmentstalkaboutdeficitbudgetsfortheprovinceorcountry,whatwouldyouadvisethemtodo?
5.Howmightyourbudgettemplatechangeasyougetolder?
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GRADE 8Personal Budgeting 101
How Spending Patterns Change Throughout Our Lives
Howmightspendinghabitsandexpenseschangethroughoutthelifecycle?Recordyourideas.
Life Stage Examples of typical expenses for the life stage
Children
Teenagers
YoungAdults
Adults
Seniors
A p p E n D i x A
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GRADE 8Personal Budgeting 101
Budget Journal Worksheet
Date: From to
Instructions:Usethissheettojournalizeeachexpensethatyoumake.
Date Expense Cost Want Need Budget Category Notes for Saving
Jan. 6 2013 Movies $10 X Entertainment I noticed I can save money if I see an early show or go on Tuesdays when prices are lower.
A p p E n D i x B
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GRADE 8Personal Budgeting 101
Personal Budget Exemplar
Jen LamPersonal Monthly Budget
Jan 1st- Jan. 31st, 2013
INCOME Budget ActualSurplus/(Deficit)
Pet sit$48 ($12/week)
$48 $0
Part-timeJob$120 ($30/week)
$140 $20
Other(gifts,etc.) $20 $0 ($20)
Income Totals $188 $188 $0
EXPENSES
Food
Orangejuice $4 $4 $0
Salad $5 $10 ($5)
Pita $10 $15 ($5)
ClothingShoes $60 $0 $60
T-shirts $10 $20 ($10)
Cell Phone Monthlybill $35 $35 $0
Entertainment Movietickets $20 $25 ($5)
SchoolSuppliesWritinginstruments $3 $3 $0
Binders $5 $5 $0
TransportationBuspass $10 $10 $0
Subway $6 $10 ($4)
OtherAlarmclock $15 $15 $0
Posters $5 $5 $0
Expense Totals $188 $157
Budgeted Surplus/(Deficit) $0
Total Actual Surplus/(Deficit) $31
A p p E n D i x C
The “Budget” column is completed prior to the start of the month.
The “Actual” column is completed at the end of the month when you receive your pay or total all expenses from your journal in a given category.
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GRADE 8Personal Budgeting 101
Personal Budget Exemplar
Planning for Future ExpensesThe$31thatyouhadleftoverattheendofthismonthcangotoyour“FutureExpenseGoal”and/ortosavings.
Future Expense Goal Expense Month Savings to date
GoonatriptoNYC $1000 January $31
February
March
April
Total Savings to date $31
A p p E n D i x C
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GRADE 8Personal Budgeting 101
Personal Budget Worksheet
Personal Monthly Budget
Name
Date
INCOME Budget ActualSurplus/(Deficit)
Income Totals
EXPENSES
Food
Clothing
Cell Phone
Entertainment
SchoolSupplies
Transportation
Other
Expense Totals
Budgeted Surplus/(Deficit)
Total Actual Surplus/(Deficit)
A p p E n D i x D
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GRADE 8Personal Budgeting 101
Personal Budget Worksheet
Future Expense Goal Expense Month Savings to date
January
February
March
April
May
June
July
August
September
October
November
December
Total Savings to date
A p p E n D i x D