*When it comes right down to it, there are actually very few things in the Needs column, but you could have a discussion with your class over things like a computer or cell phone – obviously a person does not need these items to survive, but if you are going for a job interview you will need a way for potential employers to contact you, so we can maybe argue that these days, being able to function in the world we have created (at least in an urban setting) now nearly requires either a computer or a smartphone.

Video: Middle School Money Matters video #3 on Budgeting. Simple explanation of the things the average Canadian household spends money on and how to set up a basic budget while you are still living at home (have mental math addition strategies in the video example) Also refer to Junior Achievement/Coast Capital simple budgeting video on YouTube which is very clear .

Once you have watched the video(s), write two new columns on the board, instead of labelling it ‘Needs and Wants’ label the categories “Regular Monthly Expenses” and “Extra Spending”. Have the students use what they heard in the video along with their own ideas and what was discussed earlier to come up with a list of items they think their parents regularly pay for/spend money on, and then a list of extras, things that are once in a while expenses not monthly (say at least once a year). Once you have a good list going, you will then introduce the classwork where you will be asking your students to estimate how much each of these things cost on a monthly basis.

Classwork: On the sheet provided, have students write down which of the items from the class list they think their family spends money on (while there will be some items everyone chooses, like food, some will be individual like vacations for example, so each student’s list may be slightly different). Then, once they have chosen all the items, have them estimate how much they think their family spends on these items in a month, then total the two lists at the bottom (see activity sheet). Ask a few students to share the items they chose and what they think each costs on a monthly basis, this can then lead into a discussion in the class as there will likely be wildly different ideas about how much certain things cost.

Next put the current minimum wage up on the board and explain many people work what is called the 40 hour work week which is 8 hours per day, five days a week. Have the students multiply out minimum wage at 40/hrs per week, then times 4 weeks a month (approx.) to get a monthly income amount at minimum wage. Subtract around 15% (taxes, EI, CPP and other wage deductions). This is how much someone working minimum wage has to spend, is it enough to cover what they have for their family expanses? according to their chart? What if it was two people, like a couple, sharing expenses, what does this tell you? (See example in back of booklet about basic expenses and the range of those costs in BC, share with class, what do they think?)

Background Information

Doing personal budgets is such a popular activity that there are dozens of templates and Apps that people use to help them manage their money. Most banks now have budgeting tools as part of online banking services. Personal budgeting can allow a person to visually see where their money is going each month. Budgets not only allow you to manage your cash flow, they can be used to formulate savings plans in case a person wants to save up and buy something.

Minimum Wage Budget Sample

Income: $15/hour, 8 hours per day, 5 days per week, 4 weeks per month.

$15 x 8 x 5 x 4 = $2400 – 15% taxes and payroll deductions = $2040.

Total Net Income Per month = $2040

Expenses for 1 person:

Rent (I bed apt) $1000

Utilities (electricity, Internet…) $200

Food $500

Clothing $100

Cell Phone $50

Entertainment/Hobbies $100

Transportation $50

Misc Expense/Savings $40

Total $2040

This is showing that working at minimum wage in BC, given the overall high cost of housing, makes it almost impossible for someone to live on the income from a minimum wage job alone unless they are sharing some of these expenses with someone else. This example can be shown in class or just discussed based on what students have come up with on their own.

Other possible in Class Activities related to this topic :

#1 – Show sample pay statement and discuss what the standard deductions are on a Canadian paycheck (printed sample located in blackline masters, also can be found at www.cra.ca). What is EI, what is CPP? What is a pension? What are income taxes? (look up current tax brackets on CRA website). What are some other deductions? (Extended health, dental, life insurance, union dues…) How much approximately would someone working a full-time minimum wage job expect to take home after deductions? What is the difference between gross and net income?

#2 – Use the supplied sheet of pictures of various grocery store items and have students guess how much each thing costs, like a price is right game. Then have them look up online and see if they can find an actual price for that item (or a similar item), were they close with their guesses. Keep going by having them write down everything they think they eat in a day and then try to price the items out.

In class assignment /Homework/Extension Lesson

Food budget – We have come up with an amount earlier in the class that students agree is a reasonable amount for a food budget, and we now know how much many everyday items cost because students looked them up online during the “other class activities #2”, so now students have to decide what they are going to buy. This can be done in class if there are prices on enough everyday items (can go online to local grocery store online ordering page to find prices, or perhaps even a field trip to the grocery store so they can look up the prices IRL.

Outline of activity (can be done in groups or individually)

They should come up with a list of grocery items they want to buy (perhaps based on what they have seen their parents buy) and they should use the agreed upon budget amount that the class came up with for food. Then they have to price out everything they are going to buy, decide how long those items will last and which need to be rebought during the month (milk/bread/produce likely being bought every week whereas something like ketchup, only every now and then) see sample budget and blackline master sheet they could do it paper based or in google sheets

*Final question – so if once we have bought all our necessities and some of our wants in any given month, what do we do with the rest of the money? Save it? Invest it? Where? Banks!! – Next time.