Are you struggling to teach budgeting in your classroom? Here’s an easy budgeting project your students will love!
One of the biggest challenges I faced as a personal finance teacher was teaching students who had never earned a paycheck to manage and budget their money. It is a hard concept to grasp for students who have never been responsible for bills or even gas money.
Using this budgeting project in your classroom can provide hands-on experience with managing money, making spending decisions, and planning for future spending.
What Budgeting Strategy to Use
There are many budgeting strategies to choose from. I like to expose students to a combination of strategies so they know what might work for them in the future.
However, this project starts with the 50/30/20 budget strategy to make things easy. This strategy recommends spending 50% of your income on needs, 30% on wants, and 20% on savings. It keeps things simple and provides a good guide for giving students an idea of what they can afford when they’re just starting out.
Setting up Realistic Income and Expenses
Let’s be honest. Many teenagers can have a very skewed perception of how much they’ll earn and how much things cost. To make things easy, students will draw a card that gives them their job and salary for this project. They’ll also draw a card for a spouse (some cards have no spouse on them), and a card for their number of children.
Then they’ll say goodbye to part of their income by paying their federal income tax, state income tax, Medicare tax, and Social Security tax! (If your students have yet to experience paying taxes from their paychecks, the shock on their faces will be entertaining!)
Don’t Forget Savings!
This is a great time to discuss emergency funds and why they’re important for avoiding debt. In 2024, the average individual credit card debt is $6,329. This project uses a ‘pay yourself first’ strategy and requires students to save 20% of their income before budgeting the rest of their money. They can decide whether to use this money to save in a savings account, for retirement, for their children’s college, or to invest.
Budgeting for Needs
In this section, students will learn the costs of rent, utilities, groceries, car payments, car insurance, and health insurance. I like to have students research costs whenever possible to get a true sense for the cost of living in their area.
They’ll use an apartment search website to find an apartment in your city/town that will accommodate their family size. They’ll also use a car search website to find a used car and use a monthly payment calculator to get a realistic monthly payment.
Utilities, groceries, and insurance options are provided based on their family size.
If students find that their total needs exceed 50% of their income, they’ll have to make cuts! This might mean a cheaper apartment, an older car, or less on groceries.
What about the Wants?
It’s important to show students that budgeting can help them have more money available for their wants, no matter their income.
Students can add a phone, internet, subscriptions, charitable giving, eating out, and anything else they might want to their budget.
They’ll also learn the cost of eating out. In 2024, the cost of eating out is rising much faster than grocery prices. Students will put together a meal for their family at a full service restaurant and a fast food restaurant using real restaurant prices to help them learn how much they’ll need to budget to eat out.
If students find that the total of their wants is above 30% of their income, they’ll have to make cuts!
Adding it all Up
Students will wrap up this project by completing a monthly budget summary sheet that will make their project easy to check. They should be able to prove that they’ve stayed within a 50/30/20 budget!
If they find that their expenses exceed their income, they’ll have to make cuts! (They’ll hate this, but it’s a great learning experience.)
There’s also an optional set of cards that you can use to add some surprise expenses to your students’ budgets!
Interested in using this project in your classroom?
You can find this project here. It includes a set of Google Slides to introduce the project, all of the cards you’ll need to give students their jobs, salaries, and families, and a student packet with the worksheets students will need to set up their budget.
Need more resources for teaching budgeting in your classroom?
Check out this post with even more budgeting ideas for your classroom.
