Spending Money: Budgeting Expenses
Managing money and making It work for you Needs vs. Wants ELEMENTARY SCHOOL Directions. Circle the needs. Draw a smiley face next to the wants.
You know ways to earn money. You also must consider how you plan to spend, save, invest, and share your money. Having a plan that includes specific goals is a good start. With a plan you are more likely to make decisions based on short-, mid-, and long-term aspirations instead of how you feel at the moment.
One of the best ways to allocate your dollars is to look at your goals. Consider listing them, placing a dollar amount next to each goal (how much each will cost you), and then prioritizing them. The expense budgeting process is the second half to building a budget. The previous article discussed budgeting your income. Budgeting expenses is allocating those income dollars!
Daily Expenses: Identifying Needs vs. Wants and Budgeting for Each Imagine you are thirsty and in the middle of the desert. To survive in the short term you likely will need water, but you may want juice. The concept of needs vs. wants is one that you probably know. Simply put, a need is something that is absolutely necessary to live, study, and work. A want, on the other hand, is something that you would like to have but is not essential.
School Days: Balancing Needs and Wants MIDDLE SCHOOL
Imagine that you are getting ready for the first day of school. You have $50 to spend and must buy at least six items for school. Three of the six items are: markers, pencils, and a notebook. The other three items are up to you.
1. Markers 2. Pencils
Option 1 ($, Description, Where)
3. Notebook ______________________________ 4. _______ ______________________________ 5. _______ ______________________________ 6. _______ ______________________________
Food Ice Cream Pencil and Paper Jacket
Directions. Look in your local paper, store advertisements, or on the Internet and find a price for each item. Write down two prices, a brief description, and where you found both prices. (For example, you may find a box of six markers for $4 in a newspaper and a box of one hundred markers for $15 on a website.)
Option 2 ($, Description, Where) ___________________________ ___________________________ ___________________________ ___________________________ ___________________________ ___________________________
Total Cost of selected items (choose your favorite option for each item): $
Payment Type Cash
Check Pros (+)
• immediately available • easy to access (liquid) • most merchants and individuals accept it
• immediately available • liquid • may continue to garner interest if recipient delays cashing your check and the funds remain in your bank account
Debit Card 10 Credit Card
• immediately available • able to use for Internet and phone purchases
• immediately available • increased spending power; able to purchase more expensive items • able to use for Internet and phone purchases
You may decide that although you really only need six colors of markers, you may want 100 different colors. If the 100-marker set is more expensive, you may have to buy a lower-priced item on your list. This is called balancing your needs and wants against the resources (cash) available.
Next, circle the option of each item you plan to purchase. Calculate the total for your selected purchases. Did you stay within your $50 budget? If not, do more price comparison research to find options that fit within your budget.
• not earning interest on funds • generally pay in person
• possible fees • may be required to present check in person • not widely accepted
• possible usage fees • connected to checking account, generally not earning interest
• possible annual fees • interest fees charged on account balances
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