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 budget
Receive knowledge to develop a budget to use in
their family/personal life
Create a budget using spreadsheets
Distinguish between wants and needs
Categorize wants into a list
Categorize needs into a list
Because of this exercise, students will understand
their income, expenses, and plan a realistic budget.
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
Lesson Goal: To spend less than what we earn,
make better financial decisions, and deposit any
money left into a savings account.
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
Cost or charge, cause or occasion of spending
Expenses are the bills and other things that you
spend money on.
For example, the electric bill is an expense
In addition, Expenses can include going out to
A payment received for goods or services or other
sources such as rent or investments (
Your income is the money you earn or receive each
week, bi-weekly, monthly.
It includes interest from a checking or savings
Including interest from a second job, hobbies( items
sold from what you made as a hobby, investments,
and governmental supplement income
A uniform or set rate of income per amount of time
Fixed income is an when a person has a set amount
that is earned or received weekly, monthly, bi-weekly
For example, a person who receives social security is
on a fixed income
Unexpected expenses are considered curveballs
because they are expenses you do not expect to
For example, your daughter is playing basketball and
she injuries her knee during a game.
The doctor bill and medication is an unexpected
It is important to save money ( a rainy day fund) for
Of necessity, necessarily, a must (Dictionary.com,
Needs are necessities, they are the expenses you
need to survive:
For example…Clothing, Food, & Laundry
Utilities ( gas, electric, water, food, & a
Insurance: Car, home, renter’s insurance
To wish, crave, demand, or desire. An impulse (
Wants are things that you do not need to
For example, movie rentals
Going out to eat at a restaurant
Cable TV or Satellite TV
What is debt?
Something that is owned or one bound to
pay to another (Dictionary.com, 2012).
Debt is when a person owes money
For example a mortgage, car payment, or
There are 7 steps in creating a monthly budget
1. List all of your monthly needs
2. List of some of your wants
3. Write down your monthly income or fixed
4. Add your total income if you have more than 1
5. Add your needs and your wants together to
view the Total Expenses
6. Subtract the Total Expenses from your Total
7. The money left is your monthly savings ( place
it in your savings account!)
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?
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 &