Budgeting Lesson Plan: Teaching Basic Budgeting Skills to High Schoolers (Part III)

Lesson Plan Part III: Prioritizing Mindful Spending to Maximize Happiness

We’re finally to the fun part of budgeting — spending money on the things that make us happy! If you haven’t read Part I or Part II of my lesson plan, please start there for an overview of estimating net pay and bills for students.

Part III is what I normally think of when it comes to budgeting — How much should we spend on the non-essentials? Instead of approaching budgeting from a place of restriction, I encourage students to view this part as getting to spend money on the things that make life worth living. I have students refer back to the first day activity about scarcity — what were the things they would do on their “ideal” day and how can their spending reflect these values?

Mindful spending is something I’m still practicing in my own life. It’s taken me most of my adult life to realize I have an easier time sticking to a budget if I’m prioritizing the things and experiences that truly bring value to my life. I share some of my personal budgeting failures and successes with students to encourage conscious spending on the things that bring them joy.

Going to the nail salon worked for Elle’s happiness, so it might work for my students too

Students drive this part of the budgeting activity and I try to stay in the background as much as possible. Sometimes it’s difficult for me to hold my tongue when students spend [what I view as] large sums of money on material or “more frivolous” goods, but it’s their money, not mine. If getting a manicure every two weeks makes someone happy, it’s not my place to judge. As long as students have the necessities covered and do not spend more money than they take home, it’s up to them what they purchase.

Part III: Using Yearly Estimates for Monthly Budgeting

To start this part of discretionary spending, students must decide on what types of spending they want to prioritize. While staying mindful of the money left in their budget left to spend, I direct students to focus on the things that make them happy. I offer students the following choices:

  • Cell Phone
  • Internet
  • Cable
  • Movie/Music Subscription
  • Dining Out
  • Groceries (beyond the “thrifty” plan in the necessities section of their budget)
  • Entertainment
  • Vacations
  • Shopping — Split into 3 categories: clothes/shoes/accessories, household goods/technology/”toys,” and toiletries/cleaning supplies
  • “Self Care”
  • Pet Care
  • Gym Membership
  • Gifts
  • Other (I have three “other” categories open for students. They’ve used these for things like art supplies or horseback riding lessons.)

(These can also be good budgeting options for adults who are starting their own budgets.)

I have students start with a yearly estimate for most of the categories. For example, they may only purchase an upgraded phone once a year, but must be able to plan for this spending in their monthly allotments. It’s not a good situation for costs to “sneak up” on you without preparation and planning. Plus, having yearly limits may help limit impulse purchases. If you only buy a pair of new shoes at the beginning of summer and winter, you may be less tempted to mindlessly online shop during the rest of the year.

I’ve had issues with budgeting in the past where I would buy hundreds of dollars worth of clothes for “back to school” and simply give up on my blown budget. Mentally, it was like cheating on a diet for me. Once I spent the money it was like having one spoonful of ice cream and just eating the entire carton because why not? I’ve already failed. Keeping track of my yearly spending on things like clothes help me maintain momentum (plus, a clothing ban has been good for my budget after past slip ups).

It is important to leave room in your budget for semi-annual spending like vacations or hair cuts. Building a budget around yearly spending can help make the monthly spending more inline with your actual purchases — and hopefully leave a little cushion most months that can give you some momentum in sticking with a budget. Too strict budgets may be restrictive, and it’s sometimes easier to give up then to face the failure or shame of going over budget head-on. I’ve found more success in the “little wins” — coming in under budget gives me some confidence going into the next month.

Here’s the chart I have students use. I require them to write their justifications in the “notes/explanation” section to emphasize mindful spending.

After students finish the Non-Essentials part of their budget, they will return to their overall totals to make sure the math works.

After subtracting Part I (Necessities), Part II (Bills and Payments), and Part III (Non-Essential/Fun Spending) from their Gross Wage, students will hopefully have some money leftover to save up for something independent of their required emergency savings.

Part IV: Reflection

At the conclusion of the budgeting assignment, I have students discuss their experiences with their classmates. I plan for small group discussions in class to give students the opportunity to hear what their classmates prioritized and see the similarities and differences with their peers.

To prepare for the small group discussions, I have students answer the following questions on their own first:

  1. What was one thing that surprised you about making a budget? Why?
  2. What was the most frustrating thing for you about making a budget? Why?
  3. What part of your budget are you most excited for/proud of? Why?
  4. What is a goal for your “leftover savings?” How long do you think it would take you to reach this goal?
  5. If you got a raise that resulted in a 5% increase in your net pay, how much more would you take home? What would you do with the additional money? Why?

My goal in giving students this reflection questions is for students to recognize the different aspects of budgeting and peel back some of the emotional connections to spending money. Also, hopefully students have a game-plan in mind for their savings and using money from raises wisely in order to prevent future lifestyle inflation.

Grading these student budgets and reflections is actually something I look forward to because they are a window into a student’s priorities, values, and what makes them happy. Students have interesting approaches to their spending and savings and it helps me be able to see personal finance through their eyes.

Hopefully students will walk away with positive feelings about money and budgeting!


5 thoughts on “Budgeting Lesson Plan: Teaching Basic Budgeting Skills to High Schoolers (Part III)”

      1. I wish the school system would teach kids about the different types of incomes.

        Like passive income and residual income.

        Instead of just earned income.


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