Lesson Plan
Budgeting Basics Blueprint
Students will be able to define key budgeting terms, create a personal budget, and identify strategies for managing expenses and saving money.
Mastering budgeting is fundamental for long-term financial health and independence. This lesson provides practical skills to take control of your finances.
Audience
Adults
Time
60 minutes
Approach
Interactive lecture, guided practice, and a hands-on budgeting activity.
Materials
Smartboard or Projector, Markers or Whiteboard, Your Money, Your Rules Presentation, Monthly Expense Tracker Template, Pens/Pencils, Budget Builder Challenge, and Budget Builder Solutions
Prep
Teacher Preparation
20 minutes
- Review all generated materials: Budgeting Basics Blueprint, Your Money, Your Rules Presentation, Budget Builder Challenge, Monthly Expense Tracker Template, and Budget Builder Solutions.
- Ensure projector/smartboard is working.
- Print copies of Monthly Expense Tracker Template (one per student).
- Prepare any necessary writing utensils.
Step 1
Introduction & Warm-Up: What's Your Money Story?
10 minutes
- Begin with a brief discussion: "What does 'budgeting' mean to you?" and "Why do people budget?" (2-3 minutes)
- Introduce the lesson objectives and the importance of financial literacy.
- Use a quick poll or show of hands to gauge prior knowledge about budgeting. (2-3 minutes)
- Transition to the presentation. (1 minute)
- Materials: Your Money, Your Rules Presentation
Step 2
Core Concepts: Your Money, Your Rules Presentation
20 minutes
- Deliver the Your Money, Your Rules Presentation covering:
- What is a budget?
- Income vs. Expenses
- Fixed vs. Variable Expenses
- Wants vs. Needs
- Setting Financial Goals (SMART goals)
- Basic Budgeting Strategies (e.g., 50/30/20 rule)
- Facilitate questions and brief discussions after each section. (15-18 minutes)
- Materials: Your Money, Your Rules Presentation
Step 3
Guided Practice: Monthly Expense Tracker
15 minutes
- Distribute the Monthly Expense Tracker Template.
- Guide students through filling out a hypothetical or simplified personal budget using the template.
- Discuss common expenses and income sources. (10 minutes)
- Circulate and offer individual support as needed. (5 minutes)
- Materials: Monthly Expense Tracker Template, Pens/Pencils
Step 4
Application: Budget Builder Challenge
10 minutes
- Introduce the Budget Builder Challenge game.
- Explain the rules and objectives of the game.
- Divide students into small groups or pairs to work on the challenge. (7 minutes)
- Circulate to provide assistance and observe strategies. (3 minutes)
- Materials: Budget Builder Challenge
Step 5
Wrap-Up & Reflection
5 minutes
- Bring the class back together.
- Briefly discuss key takeaways from the Budget Builder Challenge.
- Ask students to share one new thing they learned or one budgeting strategy they plan to try.
- Distribute Budget Builder Solutions for review if applicable. (2 minutes)
- Conclude by reiterating the power of budgeting for financial well-being. (3 minutes)
- Materials: Budget Builder Solutions
use Lenny to create lessons.
No credit card needed
Slide Deck
Your Money, Your Rules!
Take Control of Your Finances
- Understand where your money goes
- Make smart spending choices
- Achieve your financial dreams!
Welcome students and introduce the topic of financial literacy. Ask a warm-up question to get them thinking about money. For example: "What's one thing you hope to learn about managing money today?"
What is a Budget?
Your Financial Roadmap
- A plan for how you will spend and save your money.
- Helps you understand your income and expenses.
- Empowers you to reach your financial goals.
Define what a budget is in simple terms. Emphasize that it's a tool, not a restriction. Ask students what comes to mind when they hear the word 'budget'.
Income vs. Expenses
The Balancing Act
Income: Money you earn or receive.
- Examples: Salary, wages, side hustle, gifts
Expenses: Money you spend.
- Examples: Rent, groceries, entertainment, transportation
Explain the difference between income (money coming in) and expenses (money going out). Give relatable examples for each. You can ask students to brainstorm types of income and expenses.
Fixed vs. Variable Expenses
Predictable vs. Flexible Spending
Fixed Expenses: Usually the same amount each month.
- Examples: Rent/mortgage, loan payments, insurance
Variable Expenses: Change from month to month.
- Examples: Groceries, dining out, utilities, entertainment
Break down expenses further into fixed (consistent) and variable (changing). Provide examples for both. Ask students to identify some of their own fixed and variable expenses.
Wants vs. Needs
Prioritizing Your Spending
Needs: Essential for survival and well-being.
- Examples: Shelter, food, basic utilities, transportation for work
Wants: Things that improve your life but aren't essential.
- Examples: New gadgets, vacations, gourmet coffee
Discuss the important distinction between wants and needs. This is crucial for making conscious spending decisions. Encourage a brief discussion on how to differentiate between the two.
Setting Financial Goals (SMART)
What Are You Saving For?
Specific: Clearly defined
Measurable: Quantifiable progress
Achievable: Realistic and attainable
Relevant: Aligned with your values
Time-bound: Has a deadline
Introduce the concept of setting financial goals using the SMART acronym. Explain each letter. Have students think about a short-term and a long-term financial goal.
Budgeting Strategies
How to Make it Work for You
The 50/30/20 Rule:
- 50% of income for Needs
- 30% of income for Wants
- 20% of income for Savings & Debt Repayment
Other strategies exist! Find what works for you.
Present a popular budgeting strategy like the 50/30/20 rule. Briefly explain how it works and mention other common strategies (e.g., zero-based budgeting, envelope system) as alternative approaches.
Ready to Be a Budget Boss?
Key Takeaways:
- Budgeting gives you control.
- Know your income and expenses.
- Prioritize needs over wants.
- Set SMART financial goals.
- Find a strategy that fits your life.
Start building your financial future TODAY!
Summarize the key takeaways from the presentation and encourage students to start applying these concepts. Emphasize that budgeting is a journey, not a one-time event.
Game
Budget Builder Challenge: Your First Month of Financial Freedom!
Objective:
Successfully manage a hypothetical monthly income, pay bills, cover expenses, and ideally save some money, while making smart financial choices.
Scenario:
Congratulations! You've just started your first month with a new job and have a take-home income of $3,000 for the month. You need to allocate this money across various categories, paying attention to fixed and variable expenses, and wants vs. needs.
Instructions:
-
Your Starting Balance: $3,000
-
Fixed Expenses (Must Pay!): Deduct these from your starting balance first.
- Rent: $1,000
- Car Payment: $300
- Health Insurance Premium: $150
- Student Loan Payment: $200
- Total Fixed Expenses: $1,650
-
Variable Expenses & Wants (Make Your Choices!): You have a remaining balance after fixed expenses. Decide how you will allocate money to the following categories. Try to save at least $100.
- Groceries: (Need) You need to eat! Allocate between $250 - $400.
- Your Allocation:
- Your Allocation:
- Utilities (Electricity, Water, Internet): (Need) Estimate between $150 - $250.
- Your Allocation:
- Your Allocation:
- Transportation (Gas/Public Transport): (Need) Estimate between $50 - $150.
- Your Allocation:
- Your Allocation:
- Dining Out/Takeaway: (Want) This is optional! Allocate $0 - $200.
- Your Allocation:
- Your Allocation:
- Entertainment (Movies, Hobbies): (Want) This is optional! Allocate $0 - $150.
- Your Allocation:
- Your Allocation:
- Clothing: (Want/Need depending on situation) Allocate $0 - $100.
- Your Allocation:
- Your Allocation:
- Personal Care (Toiletries, Haircuts): (Need) Estimate between $30 - $70.
- Your Allocation:
- Your Allocation:
- Savings: (Goal) Try to save at least $100! Your goal is to allocate as much as possible here after covering needs and some wants.
- Your Allocation:
- Your Allocation:
- Groceries: (Need) You need to eat! Allocate between $250 - $400.
Challenge Questions:
- What is your remaining balance after paying all fixed expenses?
- List your total spending on Needs vs. Wants this month based on your allocations.
- Total Needs Spending:
- Total Wants Spending:
- Total Needs Spending:
- What was your final balance at the end of the month (after all expenses and savings allocations)? Did you reach your savings goal of $100?
- If you had to cut back on spending, which category (Wants or Needs) would you look at first and why?
- What was the most challenging decision you made during this budget challenge?
Worksheet
Monthly Expense Tracker Template
Name: _________________________ Month: _________________________
This template will help you track your income and expenses to see where your money is going and make informed financial decisions. Remember, knowledge is power when it comes to your money!
1. Income (Money Coming In)
| Source (e.g., Salary, Freelance, Gifts) | Estimated Amount | Actual Amount |
|---|---|---|
| TOTAL ESTIMATED INCOME: | ||
| TOTAL ACTUAL INCOME: |
2. Fixed Expenses (Bills that are usually the same each month - NEEDS)
| Expense (e.g., Rent, Car Payment, Insurance) | Estimated Amount | Actual Amount | Paid? (✓) |
|---|---|---|---|
| TOTAL ESTIMATED FIXED EXPENSES: | |||
| TOTAL ACTUAL FIXED EXPENSES: |
3. Variable Expenses (Expenses that change month to month)
Needs (Essential for Living)
| Expense (e.g., Groceries, Utilities, Transportation) | Estimated Amount | Actual Amount |
|---|---|---|
| TOTAL ESTIMATED VARIABLE NEEDS: | ||
| TOTAL ACTUAL VARIABLE NEEDS: |
Wants (Things you enjoy, but are not essential)
| Expense (e.g., Dining Out, Entertainment, Hobbies) | Estimated Amount | Actual Amount |
|---|---|---|
| TOTAL ESTIMATED VARIABLE WANTS: | ||
| TOTAL ACTUAL VARIABLE WANTS: |
4. Savings & Debt Repayment (Your Financial Goals)
| Category (e.g., Emergency Fund, Retirement, Credit Card Debt) | Estimated Amount | Actual Amount |
|---|---|---|
| TOTAL ESTIMATED SAVINGS/DEBT REPAYMENT: | ||
| TOTAL ACTUAL SAVINGS/DEBT REPAYMENT: |
5. Monthly Summary & Reflection
-
Total Actual Income: _________________________
-
Total Actual Expenses (Fixed Needs + Variable Needs + Variable Wants + Savings/Debt): _________________________
-
Net Difference (Income - Expenses): _________________________
- Is this number positive or negative? What does that mean for your budget?
- Is this number positive or negative? What does that mean for your budget?
-
What was one surprise this month (an expense you didn't expect, or a saving you made)?
-
What is one change you could make next month to improve your financial situation?
-
How does tracking your expenses make you feel about your money management?
Answer Key
Budget Builder Challenge: Sample Solutions
This answer key provides a possible set of allocations and answers for the Budget Builder Challenge. Students may have different valid approaches, so encourage discussion around their choices and the rationale behind them.
1. Starting Balance & Fixed Expenses
Starting Income: $3,000
Fixed Expenses (Must Pay!):
- Rent: $1,000
- Car Payment: $300
- Health Insurance Premium: $150
- Student Loan Payment: $200
- Total Fixed Expenses: $1,650
Remaining Balance after Fixed Expenses: $3,000 - $1,650 = $1,350
2. Variable Expenses & Wants Allocation (Sample)
(Note: These are sample allocations. Students may have different, equally valid choices as long as they cover needs and try to meet the savings goal.)
- Groceries: (Need) $350
- Utilities (Electricity, Water, Internet): (Need) $200
- Transportation (Gas/Public Transport): (Need) $100
- Dining Out/Takeaway: (Want) $75
- Entertainment (Movies, Hobbies): (Want) $50
- Clothing: (Want/Need) $25
- Personal Care (Toiletries, Haircuts): (Need) $40
- Savings: (Goal) $510 (This exceeds the $100 goal!)
3. Challenge Questions: Sample Answers
-
What is your remaining balance after paying all fixed expenses?
- Answer: $1,350
-
List your total spending on Needs vs. Wants this month based on your allocations.
- Total Needs Spending: (Groceries $350 + Utilities $200 + Transportation $100 + Personal Care $40) = $690
- Total Wants Spending: (Dining Out $75 + Entertainment $50 + Clothing $25) = $150
-
What was your final balance at the end of the month (after all expenses and savings allocations)? Did you reach your savings goal of $100?
- Calculation:
- Remaining after fixed: $1,350
- Minus Variable Needs: $1,350 - $690 = $660
- Minus Variable Wants: $660 - $150 = $510
- Minus Savings: $510 - $510 = $0 (since the remaining amount was allocated to savings)
- Answer: The final balance is $0 because all remaining income after expenses was allocated to savings. Yes, the savings goal of $100 was exceeded, with $510 allocated to savings.
- Calculation:
-
If you had to cut back on spending, which category (Wants or Needs) would you look at first and why?
- Answer: I would look at Wants first. Needs are essential for living, so cutting from them would be difficult and could impact my well-being. Wants, like dining out or entertainment, are discretionary and can be reduced or eliminated without negatively affecting my basic necessities.
-
What was the most challenging decision you made during this budget challenge?
- Answer: (Sample Student Response) "Deciding how much to allocate to wants like dining out and entertainment. It was tempting to spend more, but I wanted to make sure I had enough for my needs and could still save money."