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4.1 Budgeting for Teens

By Jennifer Pariseau
Last updated about 2 months ago
25 Questions
Note from the author:
OBJECTIVES & STANDARDS
Math Objectives
  • Write and graph linear equations and determine if a given point is a possible solution
  • Calculate percentages
  • Create a mathematical model in the form of a budget
Common Core Math Standards
  • Link to all CCSS Math
  • CCSS.PRACTICE.MP4
  • CCSS.HSF.IF.C.7.A
  • CCSS.HSF.BF.A.1
  • CCSS.HSF.LE.B.5
  • CCSS.HSM
Personal Finance Objectives
  • Differentiate between income and expenses and explain how they’re used to create a budget
  • Consider needs versus wants when deciding how to spend money
  • Build a basic budget with constant or variable income
National Standards for Personal Financial Education
Spending
  • 1a: Develop a budget to allocate current income to necessary and desired spending, including estimates for both fixed and variable expenses.
  • 5b: Brainstorm consumer research strategies and resources to use when making purchase decisions.
DISTRIBUTION & PLANNING
Distribute to students
  • Student Activity Packet
OBJECTIVES & STANDARDS
Math Objectives
  • Write and graph linear equations and determine if a given point is a possible solution
  • Calculate percentages
  • Create a mathematical model in the form of a budget
Common Core Math Standards
  • Link to all CCSS Math
  • CCSS.PRACTICE.MP4
  • CCSS.HSF.IF.C.7.A
  • CCSS.HSF.BF.A.1
  • CCSS.HSF.LE.B.5
  • CCSS.HSM
Personal Finance Objectives
  • Differentiate between income and expenses and explain how they’re used to create a budget
  • Consider needs versus wants when deciding how to spend money
  • Build a basic budget with constant or variable income
National Standards for Personal Financial Education
Spending
  • 1a: Develop a budget to allocate current income to necessary and desired spending, including estimates for both fixed and variable expenses.
  • 5b: Brainstorm consumer research strategies and resources to use when making purchase decisions.
DISTRIBUTION & PLANNING
Distribute to students
  • Student Activity Packet
Intro - Warm-up
GRAPH: Median American Household Spending
This graph shows how the average American household spends their money across a variety of common categories, with the central number representing median income.

Using the list below, estimate how much YOU personally (not your whole family) spend per year in each category.
_______ Housing
_______ Taxes
_______ Transportation
_______ Food
_______ Health Care
_______ Entertainment
_______ Apparel
_______ Total:

What other categories, not listed here, do you spend money on regularly?

In what meaningful ways does median household spending different from your own teen spending?

Learn It
VIDEO: Budgeting for Teens
In the graph above you saw both common budget categories as well as how teen budgeting might differ substantially from independent adult budgeting. This next video shows some tips for teens who want to create their own budget document.

In your own words, what is the difference between Income and Expenses?

If Mozart uses the video’s suggestion of spending 70%, saving 20%, and donating 10% and his monthly income is $250 from part-time work at his dad’s music shop, how much money would he be putting in each of those 3 categories?
_______ Spending
_______ Saving
_______ Donating

Even if you’re not in control of most of your family’s household spending, why might it be a good idea to start budgeting your own money now?

ACTIVITY: Is It a Need or a Want?
As the video suggests, saving money is an important part of budgeting, but it’s not always easy when there are so many temptations to spend, spend, spend. One way to be thoughtful about your spending is to categorize what, for you personally, feels like a need (an essential for you to live your daily life) and a want (a nice-to-have item or service that you could do without). Other than food, shelter, and water, the definition of needs is fluid and changes between individuals and their circumstances.
Maurice has an annual shoe budget of $640. On average, a pair of Jordans cost $160, and a pair of Adidas cost $40.
a. Create an equation that represents the combinations of shoe purchases that allow Maruice to stay in his budget.
_______
b. Graph the equation for his budget in Desmos and insert a screen shot (windows+Shift+s) into the show your work. (1pt)
c. Provide 2 combinations that use his entire budget, 1 combination that would be under budget_______ , and 1 combination that would be over his budget_______ .
Saige sets aside $60 per month for daily coffee. McDonalds sells coffee for $1, and The Bean Sprout sells a cup of coffee for $3.
  1. Create an equation that represents the combinations of coffee options that allow Saige to stay in her budget._______
  2. Graph the equation for her budget in Desmos and insert a screen shot (windows+Shift+s) into the show your work..
  3. Provide 2 combinations that use her entire budget, 1 combination that would be under budget_______ , and 1 combination that would be over her budget_______ .
Rylee has a monthly lunch budget of $135. If she makes and brings lunch from home, it typically costs $5 in groceries. If she purchases a meal at a restaurant, she spends $15 on average.
  1. Create an equation that represents the combinations of lunch options that allow Calista to stay in her budget._______
  2. Graph the equation for her budget Desmos and insert a screen shot (windows+Shift+s) into the show your work.
  3. Provide 2 combinations that use her entire budget_______ _______ , 1 combination that would be under budget_______ , and 1 combination that would be over her budget_______ .
Yamilka either takes a bus or Uber to get to work and has a $240 monthly budget for her round trip weekday commute. A bus ride costs $3, and an average Uber costs $12.
  1. Create an equation that represents the combinations of commute options that allow Aliyah to stay in her budget._______
  2. Graph the equation for her budget in Desmos and insert a screen shot (windows+Shift+s) into the show your work.
  3. Provide 2 combinations that use her entire budget______________ , 1 combination that would be under budget_______ , and 1 combination that would be over her budget_______ .

Why is it beneficial to map out a variety of combinations for purchases when keeping a budget?

Explain why it is important to not only graph an equation but also to interpret the different points on the graph.

Go back to Questions 3 and 4. Though the combinations on the budget line are all mathematically possible, what makes some of the solutions problematic in real life?

VIDEO or ARTICLE: How to Build a Budget If You Don't Have a Steady Income
Many teens and adults do not have a steady income every week or month. Your boss may schedule you for an irregular number of hours; you may have periods of the year where you receive gifts, refunds, bonuses, or other infusions of cash; or you may work in the gig economy or on commission where income depends directly on output. Choose to watch this video or read the article to get some tips for budgeting with irregular income.

Why is determining your “noodle budget” so important if you have an irregular income?

How are squirrels and people different?

Maurice follows The Budgetnista’s advice to “pay the pot.” As a high school student, their noodle budget is $200 per month for a cell phone bill, gas for their car, and a few other must-pay expenses.
  1. In month 1, Maruice makes $500 babysitting. Describe how much they put into the pot_______ , how much they have in usable budget_______(*add 100 for spending) , and how much remains in the pot_______ .
  2. In month 2, Maruice makes $100 babysitting. Describe how much they put into the pot_______ , how much they have in usable budget_______(*add 50 for spending), and how much remains in the pot when the month ends_______ .
Practice It
Time to practice making a budget. Your prom is 7 months away, and at your school, the average amount each student spends on prom is $850. You currently have $65 in savings.
How much, per month, do you need to save in order to have enough to pay for prom? Round up to the nearest whole dollar._______
For the past month, you’ve kept track of your spending and arrive at this list:


  1. Use this template to create a budget that allows you to attend prom in 7 months. A few tips:
  2. Be sure to read all details of the problem before you get started
  3. You may need to re-work your earnings or spending, after your first attempt, in order to make the budget work
  4. Round each value to the nearest whole dollar
  5. SUPER IMPORTANT: Use the short-hand assumption that every month has 4.3 weeks

Draw in the Show your Work below and create your budget. What made this difficult? Easy?

What earnings assumptions did you use when creating this budget?

What spending changes did you have to make, if any, for your budget to work?

What was most challenging about creating this budget?

How does this process change, if at all, if you are trying to budget for college, a car, or something else more expensive than prom?

Exit Ticket

Which statement best summarizes how income and expenses are used in a budget?
  1. Each income line has one expense line attached to it in a budget
  2. The total income plus the total expenses forms the budget
  3. The total income minus the total expenses forms the budget
  4. Income and expenses mean basically the same thing in a budget

Tonya and Tonio are twins, and they have 3 older siblings too. Which statement best classifies needs versus wants in their family?
  1. Everyone in this family likely has different needs and wants
  2. Everyone in the family has different needs but the same wants
  3. Everyone in the family has the exact same needs and wants
  4. Actually, everyone on the planet has the same needs and wants

If you work in the gig economy and have uneven earnings throughout the year, which option is best for managing your budget?
  1. Only pay your bills in months where you’ve earned above your typical amount
  2. Each month, invest your earnings in the stock market to try to double your money
  3. On months where you earn more than average, save the extra rather than spending it
  4. Be sure you spend the exact same amount every month, regardless of how much income you had