This lesson uses the Better Money Habits video How to Set a Budget and Stick to It to reinforce the concepts of budgeting introduced in Lesson 7: Managing Cash in Financial Fitness for Life, Grades 6-8.
In this lesson, students will be introduced to the six basic steps involved in building a budget or spending plan to meet their personal financial goals. In addition, this lesson will help them differentiate between fixed expenses, flexible expenses, planned expenses, and unplanned expenses.
Financial Fitness for Life is a comprehensive personal finance curriculum for K-12 students that teaches students how to make thoughtful, well-informed decisions about important aspects of personal finance, such as earning income, spending, saving, borrowing, investing, and managing money. Visit CEE’s Financial Fitness for Life website for more information on the publication and how to purchase it.
Identify the six steps for budgeting
Distinguish between fixed, variable, planned and unplanned expenses.
Tell students to write the budgeting steps showed in the video on their handout. After viewing the video, review their answers to ensure all students have completed the guide.
Ask students if they have discussed any of those steps with their parents. Remind students that a budget is simply a spending plan put in place to meet their personal or family financial goals.
Have students brainstorm different types of spending needs for their family, including saving for future wants and needs. Make a list of all expenses on the board.
Have students write down the expenses listed on the board on note cards or sticky pads. Place the four signs (Planned Expenses, Unplanned Expenses, Fixed Expenses, and Variable Expenses) around the room while students are completing this task. Tell students to place their expenses in the appropriate category.
Once students have completed this activity, review the categories to see if any are misplaced. Be sure to discuss the reasons for any expenses that are placed incorrectly.
Ask students which, if any, of the expenses were the most difficult to categorize.
Return to Lesson 7 and complete the remaining procedures given.