Lesson Plan
Cha-Ching Lesson Plan
Students will analyze a sample pay stub and create a basic budget for a first paycheck, learning to allocate earnings to expenses, savings, and discretionary spending.
Understanding pay stubs and budgeting helps students develop essential financial literacy skills, promotes responsible money management, and prepares them for real-world financial decisions.
Audience
7th Grade
Time
30 minutes
Approach
Hands-on, scenario-based budgeting activity.
Materials
- Mock Pay Stub Handout, - First Paycheck Budget Worksheet, - Job Scenario Cards, - Real-Life Expense Cards, and - Calculator or Spreadsheet Access
Prep
Prepare Materials
10 minutes
- Print enough copies of Mock Pay Stub Handout, First Paycheck Budget Worksheet, Job Scenario Cards, and Real-Life Expense Cards for each pair of students
- Gather calculators or confirm access to digital spreadsheet tools
- Preview each material to ensure familiarity with pay stub terms and expense categories
- Set up projector or smartboard to display lesson objectives
Step 1
Introduction and Objective Overview
5 minutes
- Ask students to share any experiences or ideas they have about working a first job
- Introduce key financial terms: gross pay, deductions, net pay, budget categories
- Display lesson objectives on the board and connect purpose to real life
Step 2
Examining a Pay Stub
5 minutes
- Distribute Mock Pay Stub Handout to each pair
- In pairs, have students locate and label gross pay, taxes, deductions, and net pay
- Review answers as a class, clarifying each paycheck component
Step 3
Budgeting Activity
15 minutes
- Provide each pair with one Job Scenario Card and a matching Real-Life Expense Cards set
- Hand out the First Paycheck Budget Worksheet
- Students calculate net earnings and allocate funds across expense, savings, and discretionary categories
- Encourage use of calculators or spreadsheets to check sums
- Circulate and support pairs as they make trade-off decisions
Step 4
Debrief and Reflection
5 minutes
- Invite pairs to share one budgeting challenge and how they resolved it
- Facilitate discussion on prioritizing needs versus wants and importance of saving
- Administer a quick exit ticket: “Name one budgeting strategy you’ll use if you earn money.”
Slide Deck
Cha-Ching! Your First Paycheck
Welcome to your first lesson on earning and managing money.
Today, we’ll explore how pay stubs work, create a budget, and learn to make smart spending choices.
Welcome students to the lesson. Briefly introduce yourself and explain that today’s focus is on understanding their first paycheck and making a budget. Set an enthusiastic tone.
Lesson Objectives
- Identify components of a pay stub (gross pay, deductions, net pay)
- Create a basic budget from a first paycheck
- Differentiate between needs, wants, and savings
Read each objective aloud and connect to real life: getting a job, receiving a check, and planning spending. Ensure students understand why each objective matters.
Key Financial Terms
- Gross pay: Total earnings before any deductions
- Deductions: Taxes and other withholdings (e.g., Social Security)
- Net pay: The amount you actually take home
- Budget categories: Expenses, Savings, Discretionary
Define and discuss each term with examples (e.g., gross pay: hours × rate; deductions: taxes; net pay: take-home). Invite quick student questions.
Understanding a Pay Stub
Refer to the sample pay stub shown. Locate:
- Gross Pay amount
- Taxes & other deductions
- Net Pay (take-home)
Display the Mock Pay Stub Handout on the board or projector. Ask students to point out each component as you call it out.
Budgeting Activity Instructions
- In pairs, grab one Job Scenario Card and matching Real‐Life Expense Cards
- Calculate net earnings and open your First Paycheck Budget Worksheet
- Allocate funds: suggested split • 50% Needs • 30% Wants • 20% Savings
- Use calculators or spreadsheets to check your math
Explain the pairing of Job Scenario Cards and Real-Life Expense Cards. Emphasize the suggested 50/30/20 split but allow student creativity.
Budget Categories
- Needs: Essentials (food, transportation, school supplies)
- Wants: Non-essentials (movies, snacks, gadgets)
- Savings: Goals and emergency fund
Discuss common examples for each category. Encourage students to think of a personal example (e.g., saving for a new phone).
Reflection & Debrief
- What was your biggest budgeting challenge?
- How did you decide between needs and wants?
- Exit Ticket: Write one budgeting strategy you’ll use when you earn money
Prompt a few volunteers to share their biggest challenge and their strategy. Collect exit tickets as students leave.
Worksheet
First Paycheck Budget Worksheet
Use the sample pay stub from the Mock Pay Stub Handout and your assigned Job Scenario Card to complete this worksheet.
1. Pay Stub Review
- Gross Pay (before deductions): $_______________________
- Total Deductions (taxes, withholdings): $_______________________
- Net Pay (take-home amount): $_______________________
2. Budget Allocation (50/30/20 Guideline)
Calculate each amount based on your Net Pay. Then list at least two example expenses for each category.
| Category | % Suggested | Amount You Allocate | Example Expenses (list ≥2) |
|---|---|---|---|
| Needs | 50% | $__________________ | ____________________________ |
| Wants | 30% | $__________________ | ____________________________ |
| Savings | 20% | $__________________ | ____________________________ |
3. Reflection Questions
a. Which category was easiest to allocate? Why?
b. Which category was most challenging? Why?
c. What’s one budgeting strategy you’ll use if you earn money?
(write as if giving advice to a friend)
When you’ve finished, be ready to share one thing you learned about balancing needs, wants, and savings.
Worksheet
Mock Pay Stub Handout
Below is a sample pay stub. In your pair activity, you will locate and label the following components: Gross Pay, Deductions, and Net Pay.
| Employee Name: John Doe | Pay Period: 02/01/2024 – 02/15/2024 |
|---|---|
| Pay Date: 02/20/2024 | Employee ID: 12345 |
EARNINGS
| Description | Hours | Rate | Amount |
|---|---|---|---|
| Regular Pay | 40 | $15.00 | $600.00 |
| Overtime Pay (1.5× rate) | 5 | $22.50 | $112.50 |
| ---------- | |||
| Total Gross Pay | $712.50 |
DEDUCTIONS
| Description | Amount |
|---|---|
| Federal Income Tax | $71.25 |
| State Income Tax | $35.63 |
| Social Security Tax (6.2%) | $44.13 |
| Medicare Tax (1.45%) | $10.34 |
| ---------- | |
| Total Deductions | $161.35 |
NET PAY (Take-Home Amount)
$551.15
When you receive this handout:
- Circle or highlight the Total Gross Pay amount.
- Underline the list of Deductions and note the Total Deductions.
- Draw a box around the Net Pay (take-home) figure.
- Be prepared to share how each figure relates to your budget worksheet in the Budgeting Activity.
Activity
Job Scenario Cards
Use these cards to determine your gross pay for a two-week pay period. Calculate: Hours per week × 2 weeks × Hourly Rate = Gross Pay. Then proceed to complete your First Paycheck Budget Worksheet.
Card 1: Grocery Store Associate
• Hourly Rate: $12.00
• Hours per Week: 15
• Pay Period: 2 weeks
• Job Description: Stock shelves, assist customers at checkout, bag groceries.
Card 2: Dog Walker
• Hourly Rate: $14.00
• Hours per Week: 8
• Pay Period: 2 weeks
• Job Description: Walk and care for neighborhood pets; ensure safety and hydration.
Card 3: Lifeguard
• Hourly Rate: $15.00
• Hours per Week: 20
• Pay Period: 2 weeks
• Job Description: Supervise swimmers, enforce pool rules, perform water rescues if needed.
Card 4: Fast-Food Crew Member
• Hourly Rate: $11.00
• Hours per Week: 12
• Pay Period: 2 weeks
• Job Description: Take orders, prepare food items, clean dining area, and serve customers.
Card 5: Babysitter
• Hourly Rate: $13.00
• Hours per Week: 10
• Pay Period: 2 weeks
• Job Description: Supervise children after school, help with homework, prepare snacks.
Card 6: Tutor
• Hourly Rate: $20.00
• Hours per Week: 5
• Pay Period: 2 weeks
• Job Description: Provide one-on-one academic support in math or English.
Activity
Real-Life Expense Cards
Use these cards to choose realistic expenses for your budget. Each card lists a category and an estimated cost for a two-week pay period. When completing your First Paycheck Budget Worksheet, select at least four cards to include in your Needs or Wants categories. You may also create your own expense card if you think of something not listed here.
Card 1: Cell Phone Plan
• Estimated Cost: $20
• Description: Covers talk, text, and data usage for two weeks.
Card 2: Transportation Pass
• Estimated Cost: $15
• Description: Bus or subway pass for commuting to work or school.
Card 3: Lunch & Snacks
• Estimated Cost: $30
• Description: Buying lunch at school or grabbing snacks/drinks.
Card 4: School Supplies
• Estimated Cost: $10
• Description: Notebooks, pens, binders, or printing costs.
Card 5: Clothing or Uniform
• Estimated Cost: $25
• Description: Basic clothing items or work uniform maintenance.
Card 6: Entertainment
• Estimated Cost: $12
• Description: Movie ticket, streaming subscription, or video game rental.
Card 7: Coffee & Drinks
• Estimated Cost: $8
• Description: Coffee shop visits or bottled drinks.
Card 8: Emergency Fund
• Suggested Allocation: any amount toward Savings
• Description: Money set aside for unexpected expenses.
Card 9: Gift Savings
• Estimated Cost: $15
• Description: Saving for a birthday or holiday gift.
Card 10: Gym or Activity Fee
• Estimated Cost: $10
• Description: Membership fee for gym, sports club, or online classes.
Card 11: Gas or Rideshare
• Estimated Cost: $20
• Description: Fuel for car or occasional rideshare trips.
Card 12: Charity/Donation
• Suggested Allocation: any amount toward Discretionary or Savings
• Description: Donate to a cause or organization you care about.
When selecting cards, think about whether each expense is a Need or a Want, then record the cost and category on your worksheet.
Warm Up
Budgeting Warm-Up
Take 5 minutes to answer the questions below. Be ready to share your thoughts!
- Why might someone your age choose to get a first job (beyond just earning money)?
- Imagine you just received $50. How would you decide what to spend, save, or share? Explain your thinking.
- What do you already know—or what are you curious about—when it comes to creating a budget?
When time’s up, we’ll discuss a few responses before diving into today’s lesson on your first paycheck and budgeting.