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General Financial Literacy
Strand 4 Standard 4.1:
2 class periods of 45 minutes each
Financial planning helps you use your money to get the most out of life. It is important to realize that every purchase involves cost. To be truly satisfied with a purchase depends on analyzing its costs and benefits.
Financial planning helps you use your money to get the most out of life. A financial plan, or budget, is a decision-making tool based on the basic principles of scarcity, choice, and opportunity cost. Without a financial plan, impulse buying may make it difficult to "make ends meet," no matter your income. Equipped with an understanding of financial planning, students are better able to adapt to ever-changing economic conditions.
It is important to realize that every purchase involves cost. To be truly satisfied with a purchase depends on analyzing its costs and benefits.
Source: The Mint - http://www.themint.org/teachers/sample-budget.html
Students should be familiar with the following terms: Budget Fixed Expense Variable Expense Income Expense
Explain that a budget is a planning tool that can be used to help individuals and families manage their money. The idea of a budget is to use money to stretch purchasing power and raise the budgeter's standard of living. If you're working online, ask students to click on Sample Budget. If you're working with hard copy, be sure you've printed a copy for each student. Discuss the amounts within the budget.
Source: The Mint - Budgeting Your Financial Resources