Budgets Jan 15th

Class Outline Story Time Budget Handout Case Study: “Sean”

What is a Budget? A budget is a basic tool for financial management, yet man people have difficulty setting up and sticking to one By learning how to use a budget, you can avoid spending more money than you can afford and plan your finances

Budgeting – Easier Said Than Done 66% of Canadians ages 18 to 29 say they have a monthly budget, but only 22% say they stick to it More than a million Canadian adults say they rarely/never manage to stay within their budget.

Story Time What is a budget? Why is a budget useful? a simple comparison of expected income and expenses, shows whether the money you expect to receive will be more or less than the money you expect to spend Why is a budget useful? it will help you figure out if you need to: bring in more income cut back on expenses to make ends meet (and achieve your savings goals).

Story Time What did Luna find when she did her budget? She found that she was spending more than she was earning, but she was able to balance the budget by reducing some of her expenses and increasing her income.

Handout 7-1: “My Current Monthly Budget” Create a current budget by using the income and expenses you identified on your monthly income worksheet and your monthly expenses worksheet.

Handout 7-1: “My Current Monthly Budget” Luna might have been able to balance her budget by increasing her income or cutting back on her expenses. How could you increase your income to balance your budget if you had to?

Handout 7-1: “My Current Monthly Budget” In the story, Luna figured out that she could reduce her expenses by going to the film clubs one or two nights less a month. What expenses could you (or a typical teen) cut to balance your budget if you had to?

Handout 7-1: “My Current Monthly Budget” How much of your expenses are based on needs and how much on wants? How can a budget like this help you achieve your life and personal goals? The skills you learn in balancing a simple budget and managing your finances can help you manage your money and avoid financial problems in the future.

Handout 7-2: Case Study Sean Review the story and the budget Answer the questions on the handout

Handout 7-2: Case Study Sean What unexpected expenses did Sean have to prepare for? How did Sean’s income compare with his expectations?

Handout 7-2: Case Study Sean Does Sean have a surplus or a deficit in his budget? How could Sean adjust his budget to avoid spending more than he makes?

Handout 7-2: Case Study Sean How could Sean have been better prepared for leaving school and living on his own? He could have done more research about the costs of living on his own and what income he could expect Tried to line up a job before leaving home Increased his skills to make it easier to find a job, etc.

Handout 7-2: Case Study Sean Why didn’t Sean prepare more thoroughly for leaving home? It takes time and effort to research future income and expenses, and he was excited about the prospect of living on his own People often put off financial tasks to do more exciting, fun activities and then find that financial planning would help them enjoy their lives more

Quiz Time