Creating a budget
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Introduction
In this activity students learn that budgeting is a process they can use to achieve short- and long-term financial objectives. They learn the steps involved in developing a budget and practise by developing their own budget, and/or a budget for a hypothetical scenario.
In relation to the taxation system, this learning provides a foundation for students to understand how the government uses a federal budget to achieve objectives for the common good.
Achievement standard
By the end of Year 8, students explain how markets influence the allocation of resources to the production of goods and services. They explain ways that businesses adapt to opportunities in markets and respond to the work environment. They describe the importance of Australia’s taxation system and its effect on decision-making by individuals and businesses. Students explain why individuals and/or businesses budget and plan.
Students develop a range of questions to investigate an economic and business issue. They locate, select and organise relevant information and data. They interpret information and data to identify economic and business issues and trends, and describe economic cause-and-effect relationships. They develop a response to an economic and business issue. They identify and evaluate potential costs and benefits. Students use economic and business knowledge, concepts, terms and research findings to create descriptions and explanations.
Content descriptions
Economics and Business Knowledge and Understanding
Processes that individuals and/or businesses use to plan and budget to achieve short-term and long-term financial objectives.’ (AC9HE8K05)
Economics and Business Skills
Interpret information and data to identify economic and business issues, trends and economic cause-and-effect relationships. (AC9HE8S03)
Develop a response to an economic and business issue, identifying potential costs and benefits. (AC9HE8S04)
Create descriptions and explanations, using economic and business knowledge, concepts and terms, and referencing information and data from sources. (AC9HE8S05)
Teacher resources
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Budgets and budgeting
Writing paragraphs in Economics
Student learning resources
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Become a spending detective
Developing a budget
Creating a budget
Budget template
Budget options workbook – Instructions
Interactive budget
Writing paragraphs in Economics
Suggested activity sequence
This sequence is intended as a framework to be modified and adapted by teachers to suit the needs of a class group.
- Introduce budgets by displaying and discussing slides 2 and 3 of Budget and budgeting – Visualiser.
- As a class read the case study.
- Pairs of students complete the case study questions. Refer students to the interactive budget template if they need help calculating and/or organising their data. Inform them that they will have to decide if sporting fees are a required expense or a discretionary expense and to include this cost in a chosen expense category.
- Invite the class to discuss and decide on definitions for the following terms:
- required expenses
- discretionary expenses
- paying yourself first
- budget shortfall
- budget surplus
- balanced budget
- Write these definitions on the board, and if desired, ask students to write them in their books.
- Think-pair-share: What are the consequences of poor financial management, including impact on wellbeing of the individual and families.
- Students write a short summary of the consequences of poor financial management.
- Ask students if they have developed a budget before and for what purpose.
- As a class, read through the how-to-sheet, inviting clarifying questions as required.
- Students complete the worksheet (note: students may choose either or both options to practise their budgeting skills). Students will need to access the Interactive budget templates and the and the Budget options workbook to complete the activity.
- Students write a paragraph explaining why it is important for individuals to budget so they live within their means and reach financial goals. If necessary, refer students refer to the writing paragraphs in Economics model, or teach them explicitly using writing paragraphs in Economics visualiser.
- Discuss why budgeting might be important for other economic participants, such as businesses and governments.