Lesson 3: Make a Plan

TOPIC: Budgeting
OVERVIEW:
Learners put their financial skills to the test in this module as
they travel through a simulation on creating a budget. The
module will explore fundamental elements of creating a plan for
how students spend their money and reach their savings goals.
In addition, the module will provide real-world scenarios for
Time: 60 min students to apply budgeting principles.

Supplies: OBJECTIVES:
§§Lined paper, pencils (for 1. Explain the term “budget”
students) 2. Identify categories of a budget (income, expenses, savings)
3. Create a budget
§§Whiteboard or chart paper,
markers 4. Apply budgeting skills to real-world scenarios
5. Understand the concept of “pay yourself first”
§§Projector (for teacher
presentation slides)
HANDOUTS:
§§Access to the Internet (optional)
§§Jake’s Budget §§Money Smart Book
§§Suggested books (optional):
§§Finish That Budget! (template from Lesson 1)
• Lunch Money by Andrew
§§My Budget
Clements
TEACHER PRESENTATION SLIDES:
Preparation:
§§Make copies of student handout §§How Much Is $10,000?
§§Story Problems: Budget
§§Set up projector with
presentation slides §§Spending Limits
§§Pay Yourself First

Glossary with key vocabulary 11 ESSENTIAL QUESTIONS:

§§What is a budget, and how is it useful?
§§Why is it important to set spending limits?
§§How can you stay within a budget (spending plan)?
§§What does “pay yourself first” mean?

ASSESSMENT ACTIVITIES:
Pre-Assessment: Post-Assessment:
§§Handout: Jake’s Budget §§Story Problems: My Budget
§§Handout: Finish That Budget §§Handout: Money Smart Book

MONEY SMART GRADES 3-5: Educator Guide Lesson 3: Make a Plan pg.1
 Instruction Steps
WARM UP Ask students to imagine that they each have won $10,000. Display
Defining The Term the How Much Is $10,000? slide to review examples that will provide
“Budget” students with an idea of how much $10,000 really is. Ask students to
write a paragraph or two about what they would do with the money.
20 MINUTES Ask for volunteers to share their ideas.
Next, ask: What is a budget? (a spending plan) Why is it useful and
How Much is $10,000? 11
how can it help? (It helps someone decide how much money can be
You just won $10,000? Congratulations!
Each example below is something you may be able to buy for
spent and how to spend it.)
about $10,000:
• A trip for four to another country Give students the Jake’s Budget handout (featuring a real-world
• 4 used cars
• 10 large, flat-screen televisions scenario of a budget using an example of monthly expenses of
• 20 laptop computers
• 200 video games food, rent, and other needs). Have students complete the handout
• 100 concert or amusement park tickets
• 1,000 movie tickets and share their answers.
• 10,000 packs of granola bars

Money Smart for Young People Grades 3 -- 5

Now tell students to imagine that they are grown up, they have
saved up $10,000, and this is all the money they have to live on for
five months. Display the Story Problems: Budget slide and have
STORY PROBLEMS: Budget 12

A budget is a spending plan to help you manage your money. students use the budget to solve the math questions. Provide
Directions: Read the problem and
answer the questions.
Your Monthly Expenses:
Rent $910
students with paper and pencils to do the calculations. Review the
Imagine that you are grown up. You
Car Payments $410
Food $200 problems and answers, then discuss.
saved up $10,000! Your savings will Gasoline $100
be your only income for the next five
months. (Then you start a new job.)
Your Monthly
Savings
$180
Grade-Level Modifications:
Total $1,800

1. How much money will you have left after the first month? Beginner: If students are having trouble with the math,
2. How much money will you have left after five months?
3. Which expenses can you pay for using the money you
complete the first problem as a class by writing the number
have left?
Money Smart for Young People Grades 3 -- 5
sentence required to solve the problem and modeling the
solution: $10,000 – $1,800 = $8,200. Next have students solve
the remaining steps with a partner. They may write out number
sentences to solve each step and use base ten blocks to
reflect quantities. A free virtual set of base ten blocks can be
accessed at: http://nlvm.usu.edu/en/nav/grade_g_2.html. If
students need help with the math, you may want to guide them
through all three problems. See the Answer Key for the number
sentences.
Advanced: Have students work independently or in pairs. They
may try to figure out how much would be left each month if they
used a bike instead of a car to get around (changing the monthly
bills from $1,800 per month to $1,290).

MONEY SMART TIP!

Explain to students that, over time, little savings can add up to a lot!
If you set aside a little money for your savings every time you make
money, you will soon see your savings grow.
Ask: If you save a dollar every week, what would it grow into after
a month? (about $4) 6 months? ($26, or about $24) A year? ($52)
5 years? ($260)

MONEY SMART GRADES 3-5: Educator Guide Lesson 3: Make a Plan pg.2
 GUIDED EXPLORATION Explain that having a budget helps people set spending limits.
Setting Spending Limits Ask students:
and “Paying Yourself First” §§What is a limit? (A point beyond which a person or thing is not
allowed to pass.)
10 MINUTES
§§Why might it be useful to set spending limits? (Setting spending
limits can stop a person from overspending and running out of
money.)

Display the Spending Limits slide and discuss the cartoon. Ask
Spending Limits 13

students what they think it means and why it might be risky to go

A spending limit is a limit to the amount of
money a person can spend. beyond the spending limit.
Then display the Pay Yourself First slide to explore the concept
of “paying yourself first.” (When you earn or receive money,
make sure to save and set some of it aside for yourself before
you spend it.)
Money Smart for Young People Grades 3 -- 5
Ask:
§§Why might it be a good idea to pay yourself first? (It will help
Pay Yourself First 14
you save some of your money.)
What does “pay yourself first” mean? When you receive money,
make sure to save some of it before you spend it. §§Why is it important to save some of your money? (You will
Pay yourself first by deciding how much to save. Let’s say you
decide to save 10% of your money. That means you would save:
have money to use for things you need to buy in the future.)
§ A dime (10 cents) for every $1 Remind students that a budget is a spending plan that can
§ $1 for every $10
§ $2 for every $20 help them manage their money, save for emergencies, and
Based on the example above (saving 10%), answer these
questions: meet their goals, and that they will learn to create a budget in
1. How much money would you save if you had $50?
2. How much money would you save if you had $100? the next activity.
Money Smart for Young People Grades 3 -- 5

Exploring Budgets Ask students: What are different ways kids can make money?
(Spending Plans) (For example: money for doing chores, selling cookies, babysitting,
as well as creating and selling other products or services.)
20 MINUTES Write their ideas on a whiteboard or chart paper. Explain that money
coming in is an income. Share that students may be able to find
different ways to make money, with ideas ranging from pet care to
writing their own blogs. A parent/caregiver or librarian might be able
to help students find ideas. Anyone with an income, including young
people, can use a budget to help manage his or her money.

Have students get into small groups. Tell groups that they will each
have 5 minutes to work together to brainstorm a super-hero (can
be one they have heard of or imagined) and a list of 3-5 things that
would be on their budget and 1-2 ways they would make money.

Have groups briefly share some of their ideas. Next distribute

the Finish That Budget! handout so student teams can complete
a budget for someone their age. Review answers together. Then
give students the My Budget handout so they can create their
own budget.
MONEY SMART GRADES 3-5: Educator Guide Lesson 3: Make a Plan pg.3
 Ask: How can you stay within a budget (spending plan)? (You can
stay within a budget by writing it down, checking it regularly, and
sticking to your plan. If your plan is too difficult to achieve, you can
always change it.)

Grade-Level Modifications:
Beginner: Invite one student to read the Finish That Budget!
handout directions aloud. Remind students that they need
to fill in the budget before answering the questions and then
review how to figure out the “Monthly Savings” (income minus
expenses). If students are still having trouble with the handout,
complete as a class. Then have them work on the My Budget
handout in small groups or with a partner.
Advanced: After working on the Finish That Budget! handout,
ask students: How much would Kayla have left in savings after
one year if she only put 75 cents into her monthly savings? ($9)

WRAP UP Ask:
§§Why is it useful to create a budget?
Class Reflection
§§How might you use budgeting now to plan your own spending
10 MINUTES and saving?
§§How might schools, governments, and businesses use
budgets?
As a final reflection and assessment, have students write a “Money
Smart” book entry using a Money Smart Book handout (template in
Student Guide from Lesson 1) The prompts above may be responded
to within the Money book page, a writing journal or completed as a
think-pair-share discussion with a peer or small group.

Students may keep their Money Smart Book for reflection and
discussion throughout the lessons. The summary and final product
will provide a measurable assessment. Students can also share
the book with their parents as a discussion starter about what they
have learned.

MONEY SMART GRADES 3-5: Educator Guide Lesson 3: Make a Plan pg.4
Extended Exploration
Note: Use the following activities to extend the lesson topic throughout the year. Activities can be
completed as a class, in small groups, or during center time. Duration of activities will vary.
§§Invite students to explore budgeting with the animated
band Cha-Ching as they head out on tour at
www.jacksoncharitablefoundation.org/for-kids/#episode11_

§§Let students try their hand at the Hit the Road game at
www.mycreditunion.gov/Pages/pocket-cents-game.aspx to
test their budgeting skills as they travel cross country.

§§Encourage students to explore the day in the life of different

careers as a way to think about a variety of ways to earn money
and use their personal strengths.
Visit www.connectedstudios.org/life_videos

§§Read Lunch Money by Andrew Clements, a book about a Greg,

a money-obsessed sixth- grader, who starts his own comics
company, forms a business partnership with his rival, Maura,
and learns all about business along the way.
The book can be used as a springboard for a class business
project for students to earn money to use for class needs and
wants. The business project may include ideas such as a comic
book business (as in the book) or a bake sale, art sale, and so on.

MONEY SMART GRADES 3-5: Educator Guide Lesson 3: Make a Plan pg.5
Answer Key
Student Handout 1: Jake’s Budget
Monthly Income: Taking care of younger brother: $8, Getting the
neighbor’s mail: $2, Total: $10; Monthly Expenses: Snacks and
supplies: $9; Monthly Savings: $1. Questions: 1. 25 cents ($1 or 100
cents – 75 cents = 25 cents), 2. $12 ($1 per month, or $1 x 12 = $12),
2. Answers will vary, but may include: She can spend less on snacks
and supplies, compare prices, get another job.

Student Handout 2: Finish That Budget!

Monthly Income: Taking care of younger brother: $8, Getting the
neighbor’s mail: $2, Total: $10; Monthly Expenses: Snacks and
supplies: $9; Monthly Savings: $1. Questions: 1. 25 cents ($1 or 100
cents – 75 cents = 25 cents), 2. $12 ($1 per month, or $1 x 12 = $12),
2. Answers will vary, but may include: She can spend less on snacks
and supplies, compare prices, get another job.Student Handout 3:

Student Handout 3: Finish That Budget!

Monthly Income: Taking care Answers will vary, unless students
use the suggested numbers of $15 monthly income and $8 monthly
expenses. If so: Monthly Savings: $7. Questions: 1. $84 ($7 x 12
months = $84), 2. Answers will vary, but may include: I can spend
less by comparing prices, buying fewer wants.

MONEY SMART GRADES 3-5: Educator Guide Lesson 3: Make a Plan pg.6
 Lesson 3: Make a Plan
JAKE’S BUDGET
Name: ________________________________________________________________________

A budget is to write down your income (the money you Monthly Income $1,800
expect to make), your expenses (the money you expect to Monthly Expenses
spend), and your savings (the money you expect to save). Rent $910
Car payments $410
Directions: Jake is a grown-up. Study Jake’s budget add up
the total expenses. Food $200
Gasoline $100
1. How much money does Jake put into his savings each month? Total $
Monthly Savings $180

2. What is Jake’s monthly income?

3. How much money does Jake spend on rent each month?

4. How much money in all does Jake spend on his car payments and gasoline?
(Please show your math.)

5. How much money could Jake add to his monthly savings if he spent only $175 on food?
(Please show your math.)

6. What other expenses might Jake need to add to his budget?

MONEY SMART GRADES 3-5: Educator Guide Lesson 3: Make a Plan pg.7
 Lesson 3: Make a Plan
FINISH THAT BUDGET!
Name: ________________________________________________________________________

A budget is a spending plan to help you manage your Kayla’s Budget

money. Part of making a budget is to write down the Monthly Income
money you expect to make (income), and the money (Money She Expects to Make)
you expect to spend (expenses). Some expenses repeat
Taking care of $
each month, such as rent and food. younger brother
Getting the $
Directions: Read about Kayla’s income and expenses. neighbor’s mail
Then help complete the budget and answer the
questions below. TOTAL $

Kayla is 11 years old. She earns $8 a month by taking Monthly Expenses

care of her younger brother while her father cleans the (Money She Expects to Spend)
house. The neighbors pay her $2 a month to collect the Snacks and $
mail while they are away. Each month, Kayla spends supplies
$9 on snacks and school supplies. She also puts $1 a TOTAL $
month into her savings.
Monthly Savings $
1. If Kayla puts only 75 cents into her monthly savings,
how much money would she have left over to spend
each month? (Please show your math.)

2. According to the budget, how much will Kayla have in savings after a year?
(Please show your math.)

3. How might Kayla save more money?

MONEY SMART GRADES 3-5: Educator Guide Lesson 3: Make a Plan pg.8
 Lesson 3: Make a Plan
MY BUDGET!
Name: ________________________________________________________________________

A budget is a spending plan to help you manage your money. Part of making a budget
is to write down the money you expect to make (income) and the money you expect
to spend (expenses).

Directions: Create your own budget by writing down your income and expenses
below. If you don’t have any income or expenses, use the following numbers:

Monthly income total: $15 Monthly expense total: $8

________________________________________________________________‘s Budget
Monthly Income (Money I Expect to Make)
$

TOTAL $

Monthly Expenses (Money I Expect to Spend)

$

TOTAL $

Monthly Savings $

1. According to the budget, how much will you have saved in a year?
(Please show your math.)

2. How might you save more money?

MONEY SMART GRADES 3-5: Educator Guide Lesson 3: Make a Plan pg.9