A Monthly Budget
Planning a monthly budget can be a particularly important exercise
for students. Often students have unrealistic expectations about
earning a living once they leave high school. They dramatically
underestimate the extent of everyday living expenses. Building
monthly budgets using actual expenses has long been a staple activity
of life skills math. By transferring this activity to a spreadsheet,
students can adjust and tinker with their budget, play with "what if"
scenarios, and make plans for long-term changes such as having a
family. They can also use charts such as pie charts to represent the
major portions of their monthly budget.
Note: a more complex form of this exercise can be found in
Students learn how to organize data, use basic operations
in the context of planning, and ask "what if" questions.
- Compute quantities that may include whole numbers,
decimals, and percents
- Gather data from various sources
- Solve a real-life problem using a spreadsheet
- Estimate results of computations and make adjustments
by asking "what if" questions
Discussion and Activities
Computer Lab Activities
Discussion and Activities
- Develop a Monthly Income
- Students need to work from realistic incomes. There are
many ways to do this. Gather hourly wage income from a variety
of sources (school district, fast food chains, etc.), make up
the data based on the current minimum wage, or have the
students collect this information before they start this
- It's up to you how detailed you want to be about this
income. You can start from an hourly wage to get a monthly
gross income (hourly wage x 40 hours per week x 4 weeks) and
then subtract all of the deductions (income tax, FICA, etc.).
You may want to do this on a spreadsheet file as well. If you
want to keep it simple, just approximate a monthly net income
based on the gross income.
- Build a List of Monthly Expenses
- Help students build a list of all the expenses they would
need to live on their own. Either research prices/costs in your
area or have students research some of the expenses. Use phone
books to call insurance agents and apartment managers.
Classified adds will give prices for used cars and apartments.
You can use budget.doc as a take home sheet for
collecting these expenses.
- Discuss the difference between fixed and variable expenses.
A sample budget is outlined in budget.xls. Help students
build a list of categories which vary from month to month and
may be optional such as:
- a) going out/dating
- b) tuition (college or trade school)
- c) hair cuts/beauty supplies
- d) gifts
- e) dry cleaning/laundry
- f) newspaper/magazines
- Make a Budget for Start-up Costs
- In addition to the normal monthly expenses, there are "one
time" expenses incurred when moving into an apartment or house.
An example of what that looks like can be seen below.
- a) Apartment or house rental damage deposit
- b) Utility deposits or hook-up fees, water, sewer,
- c) Moving costs (rental of truck)
- d) Basics of stocking an apartment-cleaning supplies,
toiletries, paper supplies, basic groceries, dishes,
- Have student devise a plan for how funds will be acquired
for these expenses. You can ask the following kinds of
questions: "How would you obtain the money for these start-up
expenses?" "How long would it take you to save for them?"
- Build a Spreadsheet to Calculate the Expenses
- Using spreadsheet grid paper (see Grid Worksheets)
have students write in their expenses and formulas. This
spreadsheet uses only addition and subtraction formulas. See
sample in budget.xls.
Teacher Note: This is a good lesson in which to
use a SUM formula. The formula =sum(B2:B26) totals the
numbers in cells B2 to B26. Consult your spreadsheet manual
for further details on formulas if you are not familiar with
- Have students enter data from their worksheets into a
spreadsheet and have them check their work for accuracy.
- Develop methods to reduce expenses such as:
- a) get a roommate to share rent and utilities
- b) use the bus or a bicycle instead of buying a car
- c) wait to make a major purchase such as stereo or new
- d) live at home
- Provide a list of changes and have students adjust their
budget. You can create a variety of scenarios such as:
- a) You get sick and have to pay a doctor's bill of
- b) Your car breaks down or needs new tires which cost
- c) You get a Christmas bonus of $100.
- Add expenses for starting a family (e.g., getting married,
having a baby).
- Multiply the monthly expenses to come up with a yearly budget
- Make pie chart of one month's expenses (see Pie