1.  

The purpose of this session is to provide an opportunity for you to understand their increasing independence in terms of managing personal finances.

 

• Why should you manage your money effectively?

 

• How can you manage your money effectively?

 

 

Budgeting

To have a budget means to manage your spending so that it is not more than your income.  This means that if you have £100 income in a week you should not spend more than £100 a week.  When you go away to university or you start work you may have to manage your money carefully.  In order to produce a budget you have to think about:

 

      What your income is

      What you spend your money on

      How much you spend

 

What is my income?

 

Income    £

 

 

• Make a list in the table of where you get your money from.  It may be from your parents, your part time job or EMA.

 

What am I spending my money on?

 

What other income may you have when you leave College and start to work or go to university?

 

Now make a list of all the things that you spend your money on.  Don’t forget to include small things you buy everyday, such as a soft drink or chocolate bar, and items you may buy occasionally, like clothes or going out with friends.

 

Now decide how much you spend on each item in a month.  For example, you may decide that you spend £360 pounds a year on socialising so this would be £30 each month.  Finally add the figures up to give your total monthly spending.

 

• Use this website to help you.

 

Spending     £

 

 

What other expenditure are you likely to have when you leave College and start to work or go to university? 

 

Do you spend more than you earn or earn more than you spend?

 

 

 

Things that I need – Things that I want

 

It is often necessary to prioritise your spending as we usually don’t have enough money to buy everything we would like to.  What items is it essential to pay for and what things would it be nice to have but we could do without them?

 

Now look back at all the expenditure you have identified above.  There will be some items you will have to pay (e.g. rent, electricity) and others that you would like to be able to buy but could do without. 

 

Prioritise each of your spending by putting the items you need at the top and the items you want at the bottom.

 

What does this say about the way you spend and save money?

 

 

What action could you take if your budget showed that your total spending was more than your total income?