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CFPB Building Block Activities Differentiating-fixed-Variable-expenses Guide

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88 views4 pages

CFPB Building Block Activities Differentiating-fixed-Variable-expenses Guide

Uploaded by

Tchouala Dentrish
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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BUILDING BLOCKS TEACHER GUIDE

Differentiating fixed and variable expenses


Using real-world scenarios, students identify fixed and variable expenses
and reflect on how they are similar and different.

Learning goals
KEY INFORMATION

Big idea Building block:

To manage your cash flow and maintain a Financial knowledge and


budget, it’s helpful to understand different decision-making skills
types of expenses.
Grade level: High school (9–12)

Essential questions Age range: 13–19


§ What are different types of expenses? Topic: Spend (Budgeting, Buying things,
§ When might some of these expenses happen Paying bills)
in my life?
School subject: CTE (Career and
technical education)
Objectives
Teaching strategy: Simulation
§ Understand what a fixed expense is
Bloom’s Taxonomy level: Understand,
§ Understand what a variable expense is
Create

What students will do Activity duration: 45–60 minutes

§ Use the “Differentiating fixed and variable


expenses” worksheet to identify fixed and
National Standards for Personal
variable expenses presented in real-world
Financial Education, 2021
scenarios.
Saving: 8-1, 8-2
§ Reflect on the similarities and differences Spending: 12-1, 12-2, 12-6, 12-9
between the two types of expenses. These standards are cumulative, and topics are not
repeated in each grade level. This activity may include
NOTE information students need to understand before
exploring this topic in more detail.

Please remember to consider your students’


accommodations and special needs to ensure
that all students are able to participate in a
meaningful way.

Consumer Financial
To find this and other activities, go to:
Protection Bureau consumerfinance.gov/teach-activities 1 of 4
Summer 2022
Preparing for this activity
□ While it’s not necessary, completing the “Analyzing budgets” activity first may
make this one more meaningful.
□ Print copies of all student materials for each student, or prepare for students to
access them electronically.

What you’ll need

THIS TEACHER GUIDE

§ Differentiating fixed and variable expenses (guide)


cfpb_building_block_activities_differentiating-fixed-variable-expenses_guide.pdf

STUDENT MATERIALS

§ Differentiating fixed and variable expenses (worksheet)


cfpb_building_block_activities_differentiating-fixed-variable-expenses_worksheet.pdf

Exploring key financial concepts


To plan and follow a budget, it’s helpful to identify which TIP
expenses are fixed and which ones vary month to month. Fixed
Because financial products,
expenses generally cost the same amount each month (such
terms, and laws change,
as rent, mortgage payments, or car payments), while variable
students should be encouraged
expenses change from month to month (dining out, medical
to always look for the most
expenses, groceries, or anything you buy from a store).
up-to-date information.

Teaching this activity

Whole-class introduction
§ Ask students to name some household expenses.

° Examples may include rent, car payments, groceries, or utility bills.

§ Read the “Exploring key financial concepts” section to students to explain fixed
expenses and variable expenses.

BUILDING BLOCKS TEACHER GUIDE Differentiating fixed and variable expenses 2 of 4


Summer 2022
§ Be sure students understand key vocabulary:

° Budget: A plan that outlines what money you expect to TIP


earn or receive (your income) and how you will save it or
Visit CFPB’s financial
spend it (your expenses) for a given period of time; also
education glossary at
called a spending plan.
consumerfinance.gov/
° Fixed expenses: Expenses, like bills, that must be paid financial-education-glossary/.
each month and generally cost the same amount. Some fixed
expenses, like a utility bill, may also be variable because the
amount changes each month depending on usage.

° Variable expenses: Expenses that change in amount from month to month.

Individual or group work


§ Distribute the “Differentiating fixed and variable expenses” worksheet, or have
students access the worksheet electronically.
§ Direct students to read the scenarios on the worksheet.
§ Students can work individually or with a partner to determine whether each
scenario describes a fixed or variable expense and explain how they came to
their answer.
§ Have students answer the reflection questions on their own.

Wrap-up
§ Review the scenarios as a class and have students share their answers from the
worksheets.
§ If time allows, ask for volunteers to share their answers to the reflection
questions.
§ Give students a few minutes to reflect about fixed and variable expenses.
§ Gather their collective ideas through class discussion.

Suggested next steps


Consider searching for other CFPB activities that address the topic of spending,
including budgeting, buying things, and paying bills. Suggested activities include
“Categorizing expenses” and “Bouncing ball budgets”.

BUILDING BLOCKS TEACHER GUIDE Differentiating fixed and variable expenses 3 of 4


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Measuring student learning
Students’ answers on their worksheets and during discussion can give you a sense
of their understanding.

This answer guide provides possible answers for the “Differentiating fixed and
variable expenses” worksheet. Keep in mind that students’ answers may vary, as
there may not be only one right answer. The important thing is for students to
have reasonable justification for their answers.

Answer guide
1. Variable

2. Fixed

3. Variable

4. Variable

5. Fixed

Reflection questions
Answers will vary.

BUILDING BLOCKS TEACHER GUIDE Differentiating fixed and variable expenses 4 of 4


Summer 2022

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