EQ: Create your first Budget


Introduction

You have got hired at your new part-time job. You will receive a check for $200 every month. What things do you want to have? What is most important to you? How will you use your money? You will create a personal monthly budget in the lesson. You will also analyze various financial scenarios and decide how you would react if each scenario involved you.

Task

So many young people are finding themselves in debt, sometimes before graduating from high school and certainly before graduating from college. You will make a monthly budget for yourself which will allow you to use $200.00 however you see fit. Determine what you will need and want. Think about choices you will need to make regarding savings and spending money. You must stay within the budget. You must stay within the budget.

Process

Budgeting is a helpful way to reduce the chances of falling into debt. While a budget won’t guarantee a person won’t go into debt, making and developing a budget will help reduce the chances this will happen. We know debt is a big issue facing young people, and learning how to budget, how to develop a budget, and how to stick to a budget are necessary skills for financial success.

  1. Write a list of things you need and want to have during the next month, using the What Do You Want? Worksheet (ask Teacher), and then prioritize the items on the list.
  2. Review your list and then prioritize it. Rewrite your list with the first item being the most important and the last item being the least important.
  3. Determine the cost for each item on your list. Use store websites to determine prices or make your best estimate. Ask adults if you aren’t sure or can’t find the information. Use the interactive budget page to keep your budget at or under $200.00.
  4. Total the cost of all the items on your list.
  5. Since your monthly budget is $200.00, you will need to eliminate items if your budget is over $200.00.

Assessment

In your groups, discuss each situation and decide what should be done, and what the opportunity costs are. (Click here to begin)

Teacher’s Conclusion (Mr. Graham’s note to you)

Making good financial decisions and savings at a young age is a very important ingredient toward financial success later in life. Controlling expenses and saving money help build a solid financial base. Avoiding debt by sticking to a budget is very important. You should practice these finance skills at a young age to get in the habit of saving, not overspending, and not spending on frivolous items.