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Personal Budgets

Unit 20: Managing Personal Finances
by

Lani Douangchak

on 15 February 2013

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Transcript of Personal Budgets

Aims & Objectives Aims: To understand why it is important to have a budget and how it can help with planning your everyday finances.

Objectives

1. To define the term personal budget.
2. To state at least three purposes for a personal budget.
3. To identify the areas required to planning a budget.
4. To illustrate your own budgeting plan. On the iPads please register yourself as
a student on the Natwest MoneySense Website: http://moneysense.natwest.com/schools/vle/common/register Some people always seem to get
through money quickly and often
run out long before their
next pay day.

Others always have money left over at the end of the month. What does a personal budget mean to you?... Write your answers
on a post it note
and we will share
your answers with the class. Starter Activity How do you decide if you can afford to buy something? How do you keep track of how much you spend? Unit 20: Managing Personal Finances
Topic: Personal Budgets Lets watch this video clip about
what does budgeting mean to you? A Personal Budget is...
a list of planned income and expenditure for a particular period in the future. You can compare your actual spending with what you are planned to do. KEY TERM Many people spend money without thinking or do so on impulse, which can get them into trouble as a result. http://moneysense.natwest.com/schools/resources/managing-your-money/budgeting/what-do-you-think Activity From the video answer the question:
What is the purpose of a budget?...
State at least 3 reasons

We will discuss your answer after. Objective Check You are able to...

To define the term personal budget. You can make sure that you
do not spend more than you income and so avoid getting into debt Purpose of a Personal Budget

The main reasons for having a
budgeting system are: Writing it down means
you can study where
your money comes from
and where it goes. You can see if there is
any ways of
increasing your income. You can see if there are
any ways of reducing your
spending, such as by cutting
down on something or
not buying it at all You can divide your
expenses into essential and
non-essential categories to
make the most of the
money you spend. Objective Check You are now able...

To state at least three purposes for a personal budget. Now we will look at ...

1. How to construct a budget and
2. The key elements of a budget Activity In pairs, create a mind map of what you think is required in planning
a budget.

What things would you include? You have 5 minutes
to complete this task http://www.online-stopwatch.com/countdown-clock/full-screen/ Things you may want to think about when planning your budget. What are your goals? weekly/monthly?
Where does your money go?
Every day/occasional spending?
Do you have regular commitments?
Where does your money come from?
Have you factored in savings?

Then add up everything in a list and see if its less than the money actually coming in. Essential Expenditure:
This is unavoidable
expenditure necessary
for day-to-day living
e.g. Travel, Lunch Income:
How much money is
coming in e.g. wages,
spending money Disposable Income:
Is the difference between
income and essential
expenditure. The amount
available for saving or
spending. KEY TERMS Activity Using the Budgeting worksheet provided. Read the information and begin planning your own budget.

Also, think about ways you can improve
your budget. Do you have any
targets? You have 10 minutes
to complete this activity http://www.online-stopwatch.com/countdown-clock/full-screen/ Objective Check You are now able...

To identify the areas required to planning a budget. Following on from the activity of
planning your own budget. I would like you to transfer this information onto an Excel Spreadsheet.

Try using the formula keys on Excel if
you know how. Excel Spreadsheet Activity Further Activities We will be using this
Natwest Money Sense
website throughout the unit. The passcode is: A34HY7

Continue with the activity:
Budgeting for a holiday and
Case Study: A Personal Budget Finally You are able...

1. To define the term personal budget.
2. To state at least three purposes for a personal budget.
3. To identify the areas required to planning a budget.
4. To illustrate your own budgeting plan. Objective Check You are able...

To illustrate your own budgeting plan. Do you think it is important to plan a budget?... Would you use one to help plan your finances? How do you think it would help with your future? Class Discussion Activity We will now practice your budgeting skills by playing the activity
'Money on your pocket'. REMEMBER When constructing a budget the two important elements are:

1. Income
2. Expenditure

Can you remember what they mean?.... INCOME How much money is
coming in e.g. wages,
spending money.

Can you think of any others?... Expenditure This is unavoidable
expenditure necessary
for day-to-day living
e.g. Travel, Lunch.

Can you think of any
others?... Activity Instructions You have 4 situations cards, a kitty of £500 and an envelope with numbers from 1 to 6.

The numbers represent the following values:
1 = £0 2 = £2 3 = £8 4 = £20 5 = £100 6 = £500

Each team member will pick a number from the envelop, which will determine how much money you will have to take from the kitty.

Your task is to imagine yourselves in one of the four situations and to talk to the rest of the team about:

how you feel to have that amount of money in that situation
what you would spend the money on from the choices available
how do you feel after 'spending' the money

Then return the money to the kitty for the next team member. Work through all the cards. How has this activity made you think about money?...

Do you think it affects people's lives and perceptions?...

Do you think you could of made the money you were given go a long way?...
Full transcript