Lesson Plan
Budgeting: Your Money, Your Power!
Students will be able to define income and expenses, identify common categories for each, and construct a simple personal budget.
Understanding budgeting is crucial for managing money effectively, making informed financial decisions, and achieving future financial goals. This lesson provides the foundational knowledge for financial independence.
Audience
8th Grade Students
Time
30 minutes
Approach
Interactive discussion, direct instruction, and practical application through a budgeting worksheet.
Materials
Smartboard or Projector, Budgeting Basics Slide Deck, Warm-Up: Money Matters!, Budget Builder Worksheet, Budget Builder Answer Key, and Cool-Down: Budget Breakthrough
Prep
Prepare Materials
10 minutes
- Review the Budgeting: Your Money, Your Power! Lesson Plan and all linked materials: Budgeting Basics Slide Deck, Warm-Up: Money Matters!, Budget Builder Worksheet, Budget Builder Answer Key, and Cool-Down: Budget Breakthrough.
- Ensure projector/smartboard is set up for the slide deck.
- Print copies of the Budget Builder Worksheet for each student.
- Have pens/pencils available for students.
Step 1
Warm-Up: Money Matters! (5 minutes)
5 minutes
- Display the Warm-Up: Money Matters! prompt on the board.
- Ask students to individually reflect and write down their thoughts on the prompt: "What does 'money management' mean to you? How do you think understanding your money can help you now or in the future?"
- After 2-3 minutes, briefly discuss student responses as a class, inviting a few volunteers to share.
Step 2
Introduction to Budgeting (10 minutes)
10 minutes
- Use the Budgeting Basics Slide Deck to introduce the concept of budgeting.
- Slide 1: Title Slide - Greet students and introduce the lesson's exciting title.
- Slide 2: What is a Budget? - Define budgeting as a plan for how you spend and save your money. Emphasize its importance for financial control.
- Slide 3: Income - Explain income as money you receive. Provide examples relevant to students (allowance, gifts, odd jobs, future jobs).
- Slide 4: Expenses - Explain expenses as money you spend. Categorize into 'Needs' (food, shelter, transportation) and 'Wants' (entertainment, new clothes, eating out). Use relatable examples.
- Slide 5: Why Budget? - Discuss the benefits: achieving goals (saving for a phone), avoiding debt, reducing stress, gaining independence.
- Slide 6: The Simple Equation - Introduce the basic budgeting formula: Income - Expenses = What's Left? (or Saved/Owed). Stress the goal of having more income than expenses or balancing them.
Step 3
Budget Builder Worksheet (10 minutes)
10 minutes
- Distribute the Budget Builder Worksheet.
- Explain that students will create a hypothetical simple budget based on common income and expense categories for someone their age.
- Guide students through the worksheet, encouraging them to think about different types of income and expenses. Circulate to offer support and answer questions.
- Remind them to list at least 3-5 items for each category (Income, Needs, Wants).
Step 4
Wrap-Up & Share (3 minutes)
3 minutes
- Ask students to share one interesting insight or challenge they encountered while creating their budget.
- Briefly highlight that budgeting is a skill that improves with practice and self-awareness.
Step 5
Cool-Down: Budget Breakthrough (2 minutes)
2 minutes
- Display the Cool-Down: Budget Breakthrough prompt.
- Ask students to complete the prompt individually: "Name one thing you learned about budgeting today and how it might change how you think about spending your money."
- Collect the cool-down responses as an exit ticket.
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Slide Deck
Budgeting: Your Money, Your Power!
What does it mean to control your money, instead of letting it control you?
Welcome students and introduce the lesson's title. Emphasize the empowering aspect of understanding their money.
What is a Budget?
A budget is a plan for how you earn, spend, and save your money.
It helps you:
- Understand where your money goes.
- Make smart choices about spending.
- Work towards your financial goals!
Define budgeting clearly. Relate it to planning and decision-making, which students already do in other areas of their lives.
Income: Money In!
Income is all the money you receive.
Where does income come from?
- Allowance
- Gifts (birthdays, holidays)
- Odd Jobs (babysitting, yard work)
- Future Jobs (part-time, full-time)
Explain income. Provide diverse examples that resonate with 8th graders, from current experiences to future possibilities.
Expenses: Money Out!
Expenses are all the money you spend.
We can think of expenses in two ways:
- Needs: Things you must have to live (food, basic clothes, school supplies)
- Wants: Things you desire but don't need (new video game, going to the movies, trendy clothes)
Explain expenses. Clearly differentiate between needs and wants with concrete examples relevant to teenagers.
Why Budget? Take Control!
Budgeting helps you:
- Achieve your goals (saving for a new phone or a trip)
- Avoid running out of money
- Reduce financial stress
- Gain independence by making your own money decisions
Discuss the benefits of budgeting. Connect it to student aspirations and avoiding common financial pitfalls.
The Simple Budget Equation
Income - Expenses = What's Left?
- Positive Number? Great! You have money to save or for extra wants.
- Zero? You've balanced your budget!
- Negative Number? Uh oh! You're spending more than you earn. Time to adjust!
Introduce the simple budgeting equation. Emphasize that the goal is to have enough money, or even extra to save.
Warm Up
Warm-Up: Money Matters!
Instructions: Take a few minutes to reflect and write down your thoughts on the prompt below.
Prompt: What does 'money management' mean to you? How do you think understanding your money can help you now or in the future?
Worksheet
Budget Builder Worksheet
Instructions: Imagine you receive a monthly income. Using the categories below, create a simple hypothetical budget for yourself. Try to be realistic about what you might earn and spend.
Section 1: Income (Money In!)
List at least 3 sources of hypothetical income and the amount for each.
- Source:
Amount: $ - Source:
Amount: $ - Source:
Amount: $ - Source:
Amount: $ - Source:
Amount: $
Total Monthly Income: $
Section 2: Expenses (Money Out!)
List at least 3-5 hypothetical expenses for both "Needs" and "Wants" and the amount for each.
A. Needs (Things you must have)
- Item:
Amount: $ - Item:
Amount: $ - Item:
Amount: $ - Item:
Amount: $ - Item:
Amount: $
Total Monthly Needs: $
B. Wants (Things you desire)
- Item:
Amount: $ - Item:
Amount: $ - Item:
Amount: $ - Item:
Amount: $ - Item:
Amount: $
Total Monthly Wants: $
Total Monthly Expenses (Needs + Wants): $
Section 3: Your Budget Balance
Use the simple budget equation:
Total Monthly Income - Total Monthly Expenses = What's Left?
$
- $
= $
Section 4: Reflection
- Was your "What's Left?" amount positive, zero, or negative? What does this mean?
- If you had a negative amount, what is one expense you could reduce or eliminate to balance your budget?
Answer Key
Budget Builder Answer Key
Note to Teacher: This answer key provides example responses. Student answers will vary widely based on their hypothetical incomes and expenses. Focus on their understanding of the concepts and the correct application of the budgeting equation.
Section 1: Income (Money In!)
- Example Thought Process: Students should list realistic sources of income for an 8th grader. Encourage a variety beyond just allowance.
-
- Source: Allowance, Amount: $20
-
- Source: Babysitting, Amount: $40
-
- Source: Birthday Money, Amount: $30
- Total Monthly Income: $90 (Example)
-
Section 2: Expenses (Money Out!)
A. Needs (Things you must have)
- Example Thought Process: Needs should be essential items. Encourage students to think beyond just food, to things like school supplies or basic hygiene.
-
- Item: School Supplies, Amount: $10
-
- Item: Lunch Money, Amount: $30
-
- Item: Basic Hygiene (toothpaste, etc.), Amount: $5
- Total Monthly Needs: $45 (Example)
-
B. Wants (Things you desire)
- Example Thought Process: Wants should be non-essential items. This is where students often spend the most, and it's a good place to consider cutting back if needed.
-
- Item: Video Game Pass, Amount: $15
-
- Item: Movie Ticket, Amount: $12
-
- Item: New T-shirt, Amount: $20
- Total Monthly Wants: $47 (Example)
-
Total Monthly Expenses (Needs + Wants): $45 + $47 = $92 (Example)
Section 3: Your Budget Balance
Total Monthly Income - Total Monthly Expenses = What's Left?
$90 (Example Income) - $92 (Example Expenses) = -$2 (Example)
- Thought Process: Students should correctly subtract their total expenses from their total income. The result (positive, zero, or negative) then informs their reflection.
Section 4: Reflection
-
Was your "What's Left?" amount positive, zero, or negative? What does this mean?
- Example Response (for -$2): My "What's Left?" amount was negative (-$2). This means I spent $2 more than I earned this month, so I would be in debt or would have had to borrow money.
- Teacher Note: Students should understand that a positive number means money is left over (good for saving!), zero means they broke even, and negative means they overspent.
-
If you had a negative amount, what is one expense you could reduce or eliminate to balance your budget?
- Example Response (for -$2): If I had a negative amount, I could choose not to buy the new T-shirt this month, which would save me $20 and put my budget in the positive.
- Teacher Note: Encourage students to identify specific wants they could cut back on, demonstrating an understanding of financial decision-making.
Cool Down
Cool-Down: Budget Breakthrough
Instructions: Briefly answer the prompt below as an exit ticket for today's lesson.
Prompt: Name one thing you learned about budgeting today and how it might change how you think about spending your money.