Budgeting Basics

Year Group

Year 7

Duration

45 minutes

National Curriculum Alignment

PSHE Association Programme of Study (England, Key Stage 3 - Year 7):

• Health and Wellbeing: Recognise the importance of budgeting and managing money responsibly.
• Economic Wellbeing: Understand about the role money plays in their own and others’ lives, including how to manage it, why it is important to budget and the consequences of poor budgeting.

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Learning Objectives

By the end of this lesson, students will be able to:

1. Explain what a budget is and why budgeting is important for financial wellbeing.
2. Create a simple personal budget based on a given income and expenses scenario.
3. Discuss the consequences of not budgeting and how budgeting helps manage money effectively.

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Key Vocabulary

• Budget
• Income
• Expenses
• Savings
• Needs
• Wants
• Prioritise
• Financial responsibility

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Resources Needed

• Whiteboard and markers
• Printed scenario cards (example incomes and expenses) for budget creation activity
• Budget worksheets (simple template with columns for income, expenses, balance)
• Calculators (optional)
• Paper and pens/pencils

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Lesson Structure

1. Starter Activity (5 minutes)

Activity: "What Would You Spend On?"

• Present students with a question: "Imagine you were given £50 for the week. What would you spend it on?"
• Ask students to quickly jot down their top 5 spending items in their notebooks or share verbally.
• Use this to generate a brief discussion about the difference between things they want and things they need.
• Connect responses to the idea of making choices when spending money.

2. Introduction & Explanation (10 minutes)

• Define budget simply as "a plan for your money."
• Explain terms: income (money coming in), expenses (money going out), needs (things you must have), wants (things you would like to have).
• Discuss why budgeting is important: helps avoid overspending, ensures bills and essentials are paid, helps save for future needs or emergencies.
• Give a relatable example: “If you receive £10 pocket money each week, how can you make sure you have enough for both lunch and something you want to buy?”
• Write the example on the board, showing a simple calculation balancing income and expenses.

3. Main Activity - Creating a Simple Budget (20 minutes)

• Distribute scenario cards to pairs or small groups. Each card will have a fictional weekly income (e.g., £20 pocket money, £30 part-time job) and a list of potential expenses (e.g., lunch £3, phone credit £5, video game £15, transport £4).
• Give each student a budget worksheet to fill in. They will organise their income and expenses, calculate the balance, and decide which expenses to prioritise if money runs short.
• Circulate while students work, providing guidance and encouraging justification of their financial choices based on needs versus wants.
• Optional extension: challenge students to find savings by adjusting their expenses.

4. Plenary - Consolidation and Reflection (10 minutes)

• Invite a few students or groups to present their budgets and explain their decisions.
• Hold a whole-class discussion on what they learned about budgeting and why it might be important in real life, including the impact of poor budgeting (e.g., running out of money, owing others).
• Recap key vocabulary and ask quickfire questions:
• What is a budget?
• Why is it important to prioritise needs over wants?
• How can budgeting help you save money?
• Finish with a short reflection prompt for students to write one personal budgeting goal or action they will try to implement.

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Assessment

• Formative assessment through observation of discussion and participation.
• Review completed budget worksheets for understanding of income, expenses, and calculation of balance.
• Evaluate reasoning behind students’ prioritisation of expenses and reflection responses for depth of understanding.

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Differentiation

• Provide simplified scenario cards with fewer expenses for students who need more support.
• Challenge quick learners with more complex budgets or introduce concepts like saving for long-term goals or unexpected costs.
• Use visual aids or number lines for students who require extra help with calculations.

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Extension Activities

• Research task: Find real-life examples of budgeting apps or tools and report on how they can help people manage money.
• Create a monthly budget plan for a fictional family, discussing shared incomes and bills alongside personal expenses.
• Role-play: Handle unexpected expenses (e.g., school trip costing extra money) and adjust your simple budget accordingly.

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This lesson plan is designed to engage Year 7 students using practical financial literacy aligned with the National Curriculum, building crucial life skills in managing money responsibly through active participation and reflection.