Dollars & Sense!

Creating a Family/ Personal Budget

Students will be able to define the following key terms: budget, expenses, income, wants, needs, fixed income, unexpected expense, and debt

Students will be able to plan a working budgetReceive knowledge to develop a budget to use in

their family/personal lifeCreate a budget using spreadsheetsDistinguish between wants and needsCategorize wants into a listCategorize needs into a listBecause of this exercise, students will understand

their income, expenses, and plan a realistic budget.

Lesson Objectives

Budgeting 101

This lesson will include real world reading, math, and technology skills used in monthly financial planning. Lesson Focus: Practical understanding of budgeting and differentiate between the “I want it” and “I need it” columns. Lesson Goal: To spend less than what we earn, make better financial decisions, and deposit any money left into a savings account.

Introduction

BudgetExpensesFixed IncomeIncomeNeedsWantsDebtUnexpected Expenses(Curveballs)

Key Terms

A Budget is a plan that a family or person creates to spend and save money.A plan that sets a sum of money aside that is needed for a given purpose (Dictionary.com, 2012). It helps a person learn how much he or she is spending and how much he or she is saving.(Bernstein, 36).

Budget

Cost or charge, cause or occasion of spending (Dictionary.com, 2012).Expenses are the bills and other things that you spend money on. For example, the electric bill is an expenseIn addition, Expenses can include going out to eat

Expenses

A payment received for goods or services or other sources such as rent or investments ( Dictionary.com, 2012).

Your income is the money you earn or receive each week, bi-weekly, monthly.

It includes interest from a checking or savings account

Including interest from a second job, hobbies( items sold from what you made as a hobby, investments, and governmental supplement income

Income

A uniform or set rate of income per amount of time (Dictionary.com, 2012).

Fixed income is an when a person has a set amount that is earned or received weekly, monthly, bi-weekly or monthly.

For example, a person who receives social security is on a fixed income

Fixed Income

Unexpected expenses are considered curveballs because they are expenses you do not expect to arise.

For example, your daughter is playing basketball and she injuries her knee during a game.

The doctor bill and medication is an unexpected expense

It is important to save money ( a rainy day fund) for unexpected expenses

Unexpected Expenses (Curveballs!)

Of necessity, necessarily, a must (Dictionary.com, 2012).Needs are necessities, they are the expenses you need to survive:For example…Clothing, Food, & Laundry Utilities ( gas, electric, water, food, & a telephone)Insurance: Car, home, renter’s insuranceTransportationA home

Needs

To wish, crave, demand, or desire. An impulse ( Dictionary.com, 2012).Wants are things that you do not need to survive:For example, movie rentalsMovie ticketsHobby suppliesGoing out to eat at a restaurantCable TV or Satellite TV

Wants

What is debt? Something that is owned or one

bound to pay to another (Dictionary.com, 2012).

Debt is when a person owes moneyFor example a mortgage, car

payment, or credit cards

Debt

Tracking Your Spending

There are 7 steps in creating a monthly budget1. List all of your monthly needs2. List of some of your wants3. Write down your monthly income or fixed income4. Add your total income if you have more than 1

income.5. Add your needs and your wants together to view the

Total Expenses6. Subtract the Total Expenses from your Total Income7. The money left is your monthly savings ( place it in

your savings account!)8. Adapte

Creating a Monthly Budget

Let’s Practice Steps 1-3!!!Assignment 2 Class Guided Practice Budg

eting PracticeHandout 1: Needs & WantsHandout 2: Needs & wants ExampleAssignment : Needs & Wants

Class Practice!

Class DiscussionRemember our class discussion rules!

(5minutes/student!)

1. Why do you think a budget is important in healthy family/personal financial planning?

2. What happens if we spend more than we earn?

3. How can we avoid overspending?

Instructions:Assignment 3: Monthly Budgeting: M

onthly Expenses & Weekly Savings

Independent Practice!

It’s question time!!!!Do you have any questions about today’s lesson or assignments?Ask now!

Questions???

1. What is a budget?2. Why do we need a budget?3. What is an expense?4. What is a need?5. What is a want?6. How do we calculate monthly

expenses & weekly savings?

Review

Step One: Complete the

GCF Learn Free- Pay Bills Money Tutorial: http://www.gcflearnfree.org/everydaylife/paybills

Step Two: Write down the specific information you

were asked to locate in the Pay Bills game.Answer this question:Why is it important to read your bills and how

does paying bills relate to budgeting?

Homework! Part I.

Step Three: Read the following websites:http://smallnotebook.org/2008/09/30/your-family-budget-step-by-step/

http://todaysfamilybudget.com/http://www.mint.com/blog/how-to/create-personal-budget-online-creating-an-emergency-fund/

http://financialplan.about.com/od/budgetingyourmoney/ht/createbudget.htm

http://budgeting.thenest.com/preparing-personal-household-budget-3309.html

Step Four: Complete the Budget Worksheet using the Budget Worksheet Example & Instructions. Submit the Assignment to your instructor at: bspearman000@gmail.com for credit.

Homework! Part II.

http://www.teachertube.com/viewVideo.php?video_id=188822&title=Creating_a_Budget

http://www.youtube.com/watch?v=K0cITzKS7Tg http://www.youtube.com/watch?v=BoSJ2xvy3nY http://www.gcflearnfree.org/money http://www.makeuseof.com/tag/excel-spreadsheet-techniques-to-make-a-pers

onal-budget/ http://smallnotebook.org/2008/09/30/your-family-budget-step-by-step/ http://todaysfamilybudget.com/ http://www.mint.com/blog/how-to/create-personal-budget-online-creating-an-

emergency-fund/ http://financialplan.about.com/od/budgetingyourmoney/ht/createbudget.htm http://budgeting.thenest.com/preparing-personal-household-budget-3309.ht

ml http://dictionary.reference.com/browse/budget?s=t http://dictionary.reference.com/browse/Wants?s=t http://dictionary.reference.com/browse/Needs?s=t http://dictionary.reference.com/browse/Debt?s=t http://dictionary.reference.com/browse/Expenses?s=t

Resources