How I Define a Budget Name: Subject: Semester: Todd McLauchlin Personal Finance 30 Winter 2014 Date: Grade: Lesson

Length: TBD 12 60 min

Content Identification: Now that the students have created their concept maps, I will give a more solid definition of what a budget looks like. I will ask the students to open the concept map that they created in class, as we go through the steps to creating a budget, so that they can reference what they included in their budget. The steps to creating a budget are located on the student webpage and at the end of this document. After having walked through the steps to make a budget we will look at a sample budget, then using some budget data, create a simple budget. The sample budget will be examined as a large group; however, the simple budget creation will happen individually. Each student will create their own budget; however, we will all use the same data. Outcomes (Objectives): PF(L) 5-Demonstrate understanding of personal budgets and their importance for financial planning. Indicators (Assessment): a. Describe budgeting and explain how it relates to financial problem solving and financial responsibility. d. Explain considerations that must be made when developing a budget, e.g., income, prioritizing, recurring and unexpected expenses and use them to help prioritize personal and financial goals. The simple budgets that are created will be an opportunity for the students to demonstrate their understanding of budgets and explain where to include elements of the budget.

Common Essential Learnings: Cross-Curricular Competencies: Prerequisite Learning: An understanding of the basic budgeting terms will be beneficial for this class.

Equipment/Materials: The steps to creating a budget, the sample budget for group discussion and the data for the simple budget (shared through Google Drive) will all be required for this lesson. The students will also need computers, internet access and Google Drive access. Set: (20 min) 1) Making reference to the concepts from the previous day, I will walk the students through the steps to create a budget. The students should be encouraged to contribute information from their maps as we discuss these steps. The maps, the terms from the previous day and the steps from this lesson, will all be helpful when making the first budget in this class. Development: (15 min) 1) After detailing the steps to create a budget, I will show the students a sample budget, which can be seen on the student portion of the course webpage, under Day 3 and at the bottom of this document. 2) We will briefly compare what we already know about budgeting to the sample budget I have for the class. I will also load a walk through for the sample budget to the course website, so students can review it later. (10 min)

3) After looking at the sample budget, the students will have the next 20-25 minutes to complete a simple budget, in class. The data for the simple budget will be shared with them, using Google Drive. The students will also be asked to share the completed budget back to me, so I can look over the data. Closure: (20-25 min) 1) The students will work through the creation of a simple budget, and I will provide one-on-one work time with the students as they do so, checking in to see how they are doing with the budgeting process. 2) In the next class, we will go through some roles plays/scenarios on spending, saving and budgeting and I will let the students know this before class ends. 3) The students will likely need more than 25 minutes to complete the simple budget, and they will be provided 15 minutes more next class. How I Define a Budget Step 1: Where does your money come from? Look at the net income (or after tax) pay you get from your job. Look at any interest or dividends you earn from savings or investments. Look at other regular payments you receive (rent, GST tax credit, etc.) Do not look at irregular payments (income tax return, gifts, winnings, etc.) Step 2: What do you HAVE to spend money on? (Fixed Required and Variable Required expenses) Look at your transportation (vehicle payments, gas, repairs/maintenance, transit pass, etc.) Food (Groceries) Look at housing (Rent or mortgage payments) Look at Utilities (Gas, electricity, water, phone/cell phone, sewer, etc.) Look at Insurance (Home, car, health, dental, life) Look at Education (Student loans, tuition, books, fees) Look at Family (Childcare) Look at any previously committed payments you have (Loans, credit cards, line of credit, etc.) Do NOT Look at items that are Variable or Day-to-Day Step 3: Put some money aside for a rainy day! (Savings) Often forgot, but important, before you look at the variable expenses, pay yourself! Put money into a savings account or another low risk investment vehicle to plan for the future. Emergencies, job loss, unplanned expenses such as repairs, etc. Plan for the Future (Education, vacation, retirement, etc.) Step 4: Day-to-Day Living Expenses (What you have left) (Fixed Optional and Variable Optional Expenses) Food (Dining out, snacks, etc.) Personal Grooming and Care (Body and hair products, cosmetics, etc.) Medical and Dental (The actual expenses outside your insurance or plan fees) Clothing (Both purchasing and cleaning/maintaining) Home Expenses (Furnishings, household items, etc.) Entertainment (Music, movies, games, books, shows, etc.) Gifts Vacation and Travel If you do not have enough income to cover all the expenses this is the area where you need to reduce. Always look at variable expenses before savings, as an area to cut.