Grade: 2 Lesson 13

How do budgets work? Why is it importantto budget for expenses?

SS.4.FL.2.2 Explain that people make choices about what goods and services they buy because they can’t have everything they want. This requires individuals to prioritize their wants.

SS.4.FL.2.7 Planning for spending can help people make informed choices. Develop a budget plan for spending, saving, and managing income.

Correlated Literacy & Math Standards:LAFS.2.RL.3.7 Use information gained from the illustrations and words in print or digital text to demonstrate understanding of its characters, setting, or plot.MAFS.2.NBT.2.5 Fluently add and subtract within 100 using strategies based on place value, properties of operations, and/or the relationship between addition and subtraction.MAFS.2.MD.3.8 Solve one- and two-step word problems involving dollar bills (singles, fives, tens, twenties, and hundreds) or coins (quarters, dimes, nickels, and pennies) using $ and ¢ symbols appropriately.

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SS.4.FL.2.2 Explain that people make choices about what goods and services they buy because they can’t have everything they want. This requires individuals to prioritize their wants.

SS.4.FL.2.7 Planning for spending can help people make informed choices. Develop a budget plan for spending, saving, and managing income.

How to Create a Budget

Lesson Number: 13

Correlated Florida Standards (See Full Text on Cover Page) LAFS.2.RL.3.7 MAFS.2.NBT.2.5 MAFS.2.MD.3.8

Essential QuestionHow do budgets work? Why is it important to budget for expenses?

Learning Goals/ObjectivesStudents will:

Understand the concept of a budget. Explain the importance of creating a budget, Describe how to create a budget.

Overview In this lesson students will explore budgets. Through presentations and activities, students will come

to understand the concept of a budget, the importance of having a budget, and how to create a budget.

Materials PowerPoint Presentation: Grade 2 Lesson 13 – Creating a Budget (Included in Lesson 13 file) Handouts: Dinner Party Budget and Restaurant Menus (Included within lesson plan)

Time 30 min.

Activity SequenceINTRODUCTION/HOOKDiscuss PowerPoint slides 1-2. (2 minutes)

Do: Encourage students to describe a time when they wanted to buy something but didn’t have enough money to pay for it. Describe what happened as a result.

Say: Have you ever had to buy a lot of different items at one time and then run out of money before you bought them all? If you had started with a budget, you could have followed a plan so you would have had enough money to finish shopping.

ACTIVITY1. Discuss PowerPoint slides 2-4 (3 minutes)

Say: There are many times when it is important to plan ahead – such as when you a planning a party or vacation. What are some things you do to help you plan ahead?

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Do: Encourage students to brainstorm the planning involved in the activities below, and identify ways of getting organized.

Planning a Party Preparing for a Storm Planning a Vacation

Do: Tell students that all these activities have one thing in common – they all require money. Explain to students that they will be learning about how to use a budget — a plan that helps people organize their expenses so they can meet their spending needs without running out of money.

Say: A budget is your plan for spending. Your income greatly determines the amount of money you have to pay for those things you NEED and those things you WANT. When you grow up, most of your income will be used to pay for your basic needs. Your income will also determine how much luxury afford to have.

2. Discuss PowerPoint slide 5-8 (12 minutes) Say: Most families track their income and expenses for by following a budget. This helps them make sure

they have enough money to pay for their fixed expenses each month, such as food and housing. Having a budget also helps you monitor your expenses and spending habits in an effort to have more money leftover each month. A good household budget covers basic expenses that occur on a routine basis (fixed expenses) and those unexpected expenses that vary from month to month (variable).

Do: Discuss the sample monthly household budget and have students identify fixed and variable expenses. Have students identify the family’s largest expenses and brainstorm ways the family could save some money. As a result of the family’s variable expenses this month, what happened?

Say: Families also budget, set a spending limit, when it comes to planning a party. Look at Evan’s Birthday Party Budget. Evan would like a DJ for his party, but it costs $150. What can be done to get Evan his DJ but stay within the family’s $1,000 budget?

Do: Explain to students that people must often make choices about their spending because they can’t have everything they want. They must prioritize their wants and cut expenses when possible. Shopping around for the best price and finding creative ways of saving money stretches your buying power. Have students brainstorm where Evan’s party expenses budget can be cut in order to afford the DJ. Options might include reducing the decorations and party favor budget by making your own decorations versus buying store made, shopping around for a less expensive bouncy house rental, and/or having party at home or a family member’s backyard to save money.

Say: Hosting parties and gift-giving during the holiday season also calls for many families to budget their spending. Look at Darren’s holiday gift budget. How many gifts is he purchasing? Does he stay within his budget?

Do: Encourage students to think of ways Darren can save money on his holiday gifts budget. (coupons, buying items on sale, making your own gifts, etc)

Say: Many families set money aside each month to be able to save up for their annual family vacation. They use their budget to help them plan for how much money they need to save each month. Look at the Gonzalez’s family vacation budget. About how much money will they need to save for this vacation?

Do: Ask students if it would be wise to save extra money for the vacation. Why or why not? Remind students that unexpected expenses may occur and having some additional money would be wise.

3. Discuss PowerPoint slide 9 (13 minutes) Say: Now it’s your turn to plan a budget for a restaurant outing for five of your closest friends. Your teacher

will give you a dinner party handout with your budget and restaurant menu. Do: Distribute dinner party handout and restaurant menu to students. If time permits, have students

present their dinner party budget to the class.

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CLOSURE (2 minutes)Do: Have students revisit essential question. Encourage them to share what they have learned about how budgets work and why it is important to budget for expenses.

OPTIONAL EXTENSION SUGGESTION/HOME LEARNINGSample Monthly Budget for Kids Lesson Plan http://www.moneyandstuff.info/pdfs/SampleBudgetforKids.pdf

Scholastic Budget Basics Lesson Plan & Printableshttp://www.scholastic.com/browse/lessonplan.jsp?id=1561

Sources/Bibliographic Information that contributed to this lesson: Lesson adapted from: Being Thrifty is so Nifty

http:// www-tc.pbskids.org/cyberchase/parentsteachers/lessons/pdf/finlit_beingthrifty.pdf

Budget Lesson http:// www.teachers.net/gazette/JUN08/printables/budget_lesson.pdf

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Name _________________________ Date ________________

Dinner Party BudgetDirections: You have a budget of $60 to plan a dinner party for five of your friends. Decide on one restaurant where each of your guests can enjoy a main dish, a drink, and a dessert. Be sure to stay within budget and set aside a few extra dollars for your server’s tip!

Guest Name Description Price

Main Dish

Drink

Dessert

Main Dish

Drink

Dessert

Main Dish

Drink

Dessert

Main Dish

Drink

Dessert

Main Dish

Drink

Dessert

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Restaurant MenusOutback Steakhouse Denny’s

Benihana

6

Chilli’s

Cici’s Pizza

7

Johnny Rockets

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