Aadi-39- Financial Literacy Budget Basics PDF

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Aadi-39- Financial Literacy Budget Basics grade 10...

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FINANCIAL LITERACY: BUDGET BASICS

HANDOUT [A] - Budget Basics Define Income. Money that you have. This includes money you have saved (Savings) and money you earn (Salary) Define Expenses. Money that you spend. This includes food, clothing, transportation, housing etc. List some examples of income and expenses.

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INCOME Salary/Wages Commissions (tips) Gifts Scholarships, bursaries Student Loan * Inheritance Bonus Investments EI

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EXPENSES Debt (Student Loans) Rent/Mortgage Transportation (Gas, Car Payment, Bus Pass, Car Repairs, etc.) Groceries Taxes Tuition/Books Utilities (Internet, Water, Electricity) Subscriptions (Netflix, Crave, Amazon Prime, Etc.) Clothes Entertainment Phone Bill Child Care

What is budgeting? Taking your monthly income and subtracting your monthly expenses to monitor where your money is going as well as how much you have left over.

Why is budgeting important? (ie. Why would someone create a budget?) You need to know how much money you have vs how much you're going to spend every month. This will determine how much you should save as well as how much money you have for “optional Things” What challenges might someone encounter when creating a budget? - More Expenses than income -

Some things will change from month to month

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Inaccurate numbers

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Budgeting for “emergencies”

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Budgeting can take a lot of effort

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Paying with cash- often cheaper but harder to track

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FINANCIAL LITERACY: BUDGET BASICS

HANDOUT [B] - Let’s Budget! Pretend that you are a university student and this is your identity. Login to your myBlueprint Account and create a new budget as this person. Be sure to include all the listed income and expenses. 1. Go to Money located in the Navigation Menu on the left hand side of your dashboard. 2. Click on + Add Budget and enter a budget name. 3. Using the University Student Profile information, click on + Add Income/Expense to add the income and expenses listed in the box below. a. NOTE: When adding an income or expense, make sure to select the right frequency (i.e., Is it an annual income or monthly income?) You are a student working part time as a Retail Salesperson. You are completing an undergraduate degree in Psychology. You are living away from home with a roommate. You take the metro to school and to work. You need to create a budget for your last year of university to see if you will have enough money to travel once you graduate. Expenses: Tuition - $8000 per year Housing - $600 per month Cell Phone - $40 per month Metro Pass - $120 per month

Income: Work income - $1200 per month Bursary - $1000 per year Student Loan - $5000 per year

How much money do you have left over for food costs? Enter this into your budget. I have $250 left over every month for groceries. What other costs do you need to consider? Enter these into your budget. Some other costs considered in my expenses are internet bills for the month, entertainment and clothes for the year. Can you afford to travel this summer after you graduate? How much money could you spend? I can not afford to travel this summer after I graduate currently I am $1250 in dept. What steps can you take now to ensure that you will have enough money to travel next summer? I can work more hours for my part time job to make more income. I can also cut off some entertainment and clothing expenses. Besides my part time job I have no other form of income so I can invest some of my money in stock or crypto currency to make more money so I am not in debt and ensure I will have enough money to travel next summer.

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FINANCIAL LITERACY: BUDGET BASICS

REFLECTION QUESTIONS: 1. What surprised you most about this budget? What surprised me most about the budget was all my expenses and how I had more expenses than income, ultimately leaving me in debt. When adding up all the expenses, I realized how much money it cost for different things like groceries, entertainment, rent and more. I was surprised how quickly all these added up and left me in debt. 2. What strategies did you use to create this budget? Were these useful? I used two main strategies to create my budget, and those were tracking my spending and adjusting my habits. It was helpful to keep track of and categorize my spending so I know where you can make adjustments. Doing so helped me identify what I was spending the most money on and where it might be easiest to cut back. After seeing my income and expenses, I start to see where I have money leftover or where I have to cut back to have money to put toward my goals. It was useful adjusting my habits because it allowed me to reduce my spending and leave more money left over. 3. What challenges did you encounter when creating this budget? How did you overcome them? I encountered two main challenges when creating this budget, and these were having more expenses than income and inaccurate numbers. Because I don't really know how much my tuition would be or how much money I would make from my part-time job. It was hard to build a correct budget, and most of the time, I had more expenses than income because of this. To overcome these challenges, I tried to make my budget the most realistic it can be. I tried to plan out my income with a minimum wage job, and some student loans to not have high expectations and not spend more than I need to. 4. Do you feel that having a budget will help you in the future? Explain why. I believe that having a budget will be extremely beneficial to me in the future. Since it helps me to construct a spending plan for my future, I will always have enough money for the things I need and the essential things for me. Following a budget or spending plan will also keep me out of debt if I have any future. A basic monthly budget can help me figure out where my money goes. It can reveal what's changed in my spending patterns when compared to past months. For instance, even knowing that I spent more on clothing this month can motivate me to spend less next month. Having a budget keeps my spendings in check and makes sure my savings are on track for the future.

5. Did you notice any feelings that came up during or after you created the budget? Where do these come from? How will you overcome them? I felt a slight feeling of sadness after making my budget. I realized how hard university can be and how some of the things I have or do daily will be gone. For example, I will be eating less and different from now because of budgeting, and I will not be going out to eat as much. The feeling of sadness comes from myself realizing how different life will be. To overcome these feelings, I

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FINANCIAL LITERACY: BUDGET BASICS will adjust my habits early, so I become used to a different life. This will allow me not to feel sad and miss what I had before.

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