"Money Management for Adults - Budgeting" is a 1-hour lesson on how to budget. It is aimed at adults aged 18+ with reading and math skills at grade 7 or higher, in need to learn how to work methodically with financial information toward making financial decisions.
Upon completion of this lesson, students will be able to: (a) distinguish income and expense items during a given time period; (b) calculate savings, deductions, provisions and net income; (c) make a budgeting decision based on data and constraints; (d) produce a financial report on paper; (e) make a digital copy of the report; (f) understand terminology relevant to budgeting.
An optional 1-hour supplement for answering specific questions and for additional supervised practice is deemed reasonable. Students are advised to revise the lesson contents or similar resources in regular intervals for a deepened understanding of the subject matter.
Required material: computer with Internet access, printouts, pen, calculator
Step 1 (10 min): Introductory discussion
The instructor starts an introductory discussion on budgeting with the students. Inspiration is drawn from a relevant online article by Wells Fargo Bank NA. The article is presented on a computer screen and a bookmark is set for future reference (students are exposed to using a computer for information purposes even though this is not the point of focus).
Students share their positive or negative experience spending and saving money. Emphasis is given to the need to work methodically, and to the existence of simple tools that can facilitate regular and accurate record-keeping. The teacher helps the students find ways to integrate this skill into their own routines depending on their learning style and habits.
Step 2 (15 min): Examples of budgeting
Copies of a Q&A worksheet are given. The aim is to learn to use this worksheet as a template in order to monitor expenses and income and to present one’s financial data to other people. Indicative format /content:
A. Clarification of relevant terms and examples: income / gross income / net income / spendable income; fixed expenses /flexible expenses /discretionary expenses; revenues and costs.
B. Exercise with numerical data: given information on hourly wages, monthly work time and expected expenses, (i) calculation of spendable income per week, month and year (ii) decision to buy or not to buy products of varying value, duration and utility (e.g. a tablet, a gym subscription, a car, a set of clothes, a medical insurance plan) (iii) decision on saving for various purposes. This is to be solved on paper. (Suggested source: “Lesson 9: A Plan for the Future: Making a Budget” in “Practical Money Skills” by Visa)
Step 3 (20 min): Using a computer
The instructor shows the basics of opening, modifying, completing and closing digital budgeting forms. A document or a video containing simple instructions on using a computer for budgeting purposes has already been placed on the desktop; digitally-challenged students only need to remember how to use the mouse to open said file and to practice alone. A shortcut to the tools freely shared online by Wells Fargo Bank NA is also present. Students are invited to solve an exercise like the problem in Step-2_B using a digital calculator and a word processor.
Step 4 (15 min): SMART goals and entrepreneurship
The instructor explains the concept of SMART (Specific, Measurable, Attainable, Realistic, Timely) goals as a tool to guide one’s financial decisions. A second worksheet with reminders, a couple of examples and a checklist is given. Students are asked to formulate the goals implied in the exercises done so far according to the SMART format and then to set their own SMART goals.
The instructor then proceeds to explain how setting your goals clearly can help with business, especially when one has to deal with governmental authorities or sponsors. Students discuss budgeting problems in their current or intended workplace. For example, a person aspiring to run a farm in the future comes to reflect on possible revenues and costs (buildings, machinery, equipment, live stock, crops, utilities, communication, taxation, wages, insurance, sales, rent etc) and the instructor looks for and suggests tailored budgeting resources available online (see an Australian example here). A third worksheet is derived from this discussion for later use.
Step 5 (60 min /later date - optional): revision of content, discussions of difficult points and homework grading. Additional exercises both on paper and on the computer.
Created by A. Loukeri under the Creative Commons CC BY 4.0 license.
Acknowledgements - Attribution
This lesson is based on "Long Term Money Management for Adults" authored by Michael Allen and published on OER Commons in December 2016 under the Creative Commons CC BY 4.0 license. It has been largely reworked in an effort to conform to the standards set in the e-course "Instructional Evaluation Service: Gain Experience for Good" for its final assignment.