Budgeting

Learning objectives

To Know• What a budget is• Calculate a budget over three monthsTo understand• How to improve a budget• Why budgeting is important

Starter

Why would a person want to manage their money?• To pay monthly bills• To save for a one off item• To avoid debts• To manage any debts• Piece of mind

What is a budget?

A budget is a way of diving up your money and deciding what to do with it.

One day…

• One day you will have to decide how to spend your money. You will have to decide how to manage your inflows (income) and outflows (expenses)

Task 1 • Jess is currently studying A levels at College and she has

been working hard all year. To celebrate Jess and her friends want to go on holiday to Greece in June. Jess had been doing some personal financial planning. She needs £300 to pay for the holiday and £300 spending money. At the moment Jess has one way of income from babysitting her nephew once a month. Although she still receives some pocket money. Jess still likes to buy regular products such as downloading music and going to the cinema as well as shopping. She realises she needs extra income so she gets a part time job as a waitress at her local restaurant.

Inflow OutflowJess will receive £50 pocket money each month Jess will receive £20 a month for babysitting Jess starts working for the restaurant in April and will receive £200 per month Jess spends £20 a month on downloading music Jess spends £10 a month at the cinema Jess has to spend £10 per month to get to college Jess decides to buy some holiday clothes in May and she spends £150 in total She had £50 in her bank at the start of March

Total

Task 2 : John is saving for some football boots that cost £60. Calculate his budget.• His current inflows:• Pocket Money - £40 a month• Part time job washing cars - £50 a month• His outflows are• Football ticket at Notts County - £30 month• Cinema - £5 a month• Food £20 a month