Subject: Economics
1. Topic-
2. Content-
Saving, spending, interest rates, planning for the future
3. Goals: Aims/Outcomes-
1. To help students gain an understanding of the importance of personal budgeting
2. To convince and encourage students to use budgeting techniques to control and manage their money effectively in the long run
3. To instill a sense of financial discipline in the student and convict them to go and plan with their resources rather than aimlessly spending money
4. Objectives-
1. Work through and complete the personal budget table using the example numbers provided
2. See how students would be affected when sudden shocks occur financially under well-budgeted and poorly managed situations
3. Check their understanding with a fun and interactive activity
5. Materials and Aids-
Budgeting worksheet (3 pages), calculator, pen/pencil
6. Procedures/Methods-

A. Introduction-

1. Start to get students thinking by asking them a set of questions and seeing their pre-lesson thoughts on budgeting.
2. Ask them, "If you were to receive $100 dollars today from your parents, how much of it would you spend, and on what?"
3. Looking at their responses, and allowing them to compare to other students, they would gain a better understanding that each one spend their money differently.

B. Development-

1. Introduce the concept of budgeting as making a list of expected income and expenses for a time period.
2. Show that the use of a table format to plan a budget can be very useful.
3. Ask them for reasons why it might be important to make a budget for each month of the year, and encourage their response over to the correct answer.

C. Practice-

1. Run through an example using the budgeting worksheet attached, staring with a simple income of $20,000.
2. After completing, have each one review their tables, making them think about whether they allocated enough money to each section, including savings. Remind them that sometimes things can happen unexpectedly that require funds, such as having a child or car accidents. Place out an unexpected cost, (e.g. $4300 in unexpected car repairs when colliding with another car on the highway). Ask them whether they have enough money saved up to pay for this, or have they spent too much of it?
3. Afterward, have them switch to the second table, and ask them to fill it out again, keeping in mind this time that they can't always predict the future, and therefore, putting some money always into saving could be extremely wise. Remind them that putting money in savings accounts not only makes sure that there is money on hand for emergencies, but that money sitting in the bank earns money as well, dependent on the interest rate. So holding off a bit of consumption now can help increase the amount of things they can buy in the future.
4. Finally switch to scenario 3, where debt has become been added as an expected expense, and ask students where they shifted their money from to accommodate this new cost. Help them keep in mind that dipping into savings should be considered against, since unexpected events can still arise and don't happen any less frequently just because they have debt repayment.

E. Checking for understanding-

1. Play a quick interactive game with the students. Have 2 teams for the class. And ask (not with the help of their worksheets) each team to write down and rank 5 expected areas of expenses, aiming for popular responses, like in "Family Feud". Each correct response from pre-designated top 10 responses on teacher's list will get x amount of points, determined by popularity. More popular responses (indicating more important areas of expenses) earn more points.
2. Ask them to write down 5 legitimate unexpected expenses or shocks that can arise at any time. Each correct response warrants y amount of points (x and y are arbitrary and can be left up to the instructor to determine their value)
3. Tally up points and see which team won. Winning team gets treat of some sort (candy, extra credit points, etc.)

F. Closure-

1. Ask students to return to their seats and run through closure questions, to make sure students grasped the concepts. Make sure they can answer why budgeting is important, how can they organize their expenditures and expected income, and why is it important to stick to the budget.
2. Encourage them to make a budget for this week and try to stick to it. Have them evaluate at the end of the week and see how well they were able to stay within their proposed spending limits in each area.

This Lesson Plan is available at (