BALANCING ACT!

Let’s Talk Budgeting! Picture these scenarios: • Jacinta gets paid on Friday and she decides to go shopping. At the end of her shopping spree she has spent all of her pay and is in a panic because her rent is due in 2 days. How could she have avoided this problem? • Karim has paid his rent and utility bills but had nothing left for food. What will he survive on until his next pay cheque in 7 days? How could he have avoided this problem? • Courtney decided to put $50 from each pay cheque into a savings account for a number of months so she can buy a laptop before school starts in September. However, she has spent that $50 from her last three pay cheques on new clothes and now won’t be able to buy the laptop she needs for school. How could she have avoided this problem? The answer is simple –manage your money better by coming up with a budget! Keeping track of how much money you have, what you are spending it on – and knowing whether or not you can afford to buy what you want – are the secrets to success with money. A budget can help you manage your money. It is key to financial control. It gives you a picture of where you stand financially and where you’re headed. It can help you save money, plan for the future and avoid running out of money before you get paid again! The Ins and the Outs of a Budget A budget is a plan that has two parts: Money In Income which includes money earned at a job, allowance, and gifts. Money Out This shows how you use your money. It includes the money you spend, save, invest and if you choose to, the money you donate. Spending includes everything you need to spend money on – your required expenses. For example, rent, food, electricity, heat or in the case of students living at home things like bus fare. Spending also includes the money you spend on extras – those things you buy just because you want them such as snacks, a movie ticket, pizza for dinner or a video game. Other money going out is that which you save/invest and donate. Investing means to save money in some way. When you put money into an account that provides interest or when you buy other products which yield a return on your money you are investing your money. Sometimes investments such as stocks, bonds and guaranteed investment certificates offer a greater return on your money than the interest offered on a savings account at a bank or credit union. And, there are many investment options. In addition, to stocks, bonds and guaranteed investment certificates there are treasury bills, mutual funds, term deposits and so many more. A lesson on these investment options will have to wait for another unit, though. Other money going out are those funds you may choose to donate to a charitable cause. What’s the Plan? Earlier, you read about how Jacinta, Karim and Courtney ran out of money. A good way to avoid this happening is to have a weekly budget. Have a look at this one: What do you notice about how Tanis manages her money? If you noticed that she doesn’t spend more than she has – you’d be right. She is “living within her means” and her budget balances. That indicates Tanis’ budget is a good one. Do you have a choice in the matter? Of course you do. Budgeting involves all kinds of choices. You choose what to do with your money and how much goes where. You choose how much you will save. You choose how much you will spend and you choose what you spend your money on. You also make a choice when deciding whether or not to donate and to which charity you will make a donation. What about buying a birthday gift for a friend. Choice also comes into play here - Do you buy a birthday gift for $20 or one for $10? One thing is certain. It does take some time and thought to spend wisely. You need to think about what you want today as well as what you want tomorrow. Speaking about Tomorrow Fast forward a few years. Imagine yourself as a parent with your own family. What money comes into your household and what money goes out? What expenses will you have? Likely a few more than you have right now .... Next Up: Piggy banks, big banks, and credit unions. Newspaper Activity Sometimes your income may change or unexpected car or house repairs affect your budget. In these cases it becomes necessary to adjust your budget by cutting some of your other expenses. There are a number of ways you can do this: • When looking to buy large items - a car for example, or a television you might choose to buy second hand. The classified advertisements are a good place to look for used items. • When it comes to food and toiletries, grocery stores will often have specials on items and they often offer coupons so you can save money on purchases. Display advertisements within the newspaper and flyers are a good place to look for these kind of deals and coupons. • When it comes to entertainment, there are often many things going on in the community which are free of charge. The ‘Too Good to Miss’ piece that appears in The Spectator every Friday lists free events in your community. Your goal today, is to find out how much you can save by buying used, purchasing grocery items on sale or with coupons and by choosing a free community event for your entertainment this week. Follow the instructions on blackline master 4 which your teacher gives you to make some budget cuts. Fundraising Plan Your class is the Marketing Team for your fundraiser. The Marketing Team is responsible for developing, designing and implementing an advertising campaign for the fundraiser. • As a class discuss: What different types of promotional activities could you engage in to make people in your school aware of your fundraiser? What are teaser ads and how can they be used effectively? What types of promotional activities can you think of for each of the advertising platforms listed below? Choose at least one print promotional activity and then vote for two or three other types of promotional activities you will use. When choosing, think of what will appeal to your audience and what will encourage them to attend your fundraiser. • When it comes to advertising across a few platforms you want to make sure your message is consistent. One of the ways this can be achieved is to use a tagline. For the next installment try to come up with a tagline that can be used in your promotional activities. To get the creative juices flowing look at the well-known taglines above and below. Can you think of the company or product that each tagline belongs to