LEVEL 1c Create a Budget

Open Ended

Before we learn about budgeting, what does budgeting mean to you and why might it be important?

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Predict at least 3 unexpected expenses you might have to save up for (think about things people have to spend a lot of money on that they were not planning on)

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Poll

Which of these 5 reasons do you think is most important ? Be ready to explain why on the next slide

• Stops overspending

• Helps you reach your goals

• Makes more room for stuff

• Allows you to be flexible

• Puts you in control

Open Ended

Which of the 7 reasons for budgeting is most important? Explain why in 1-3 sentences

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Why does having a goal when you budget help you stick to your budget? 

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Tell me YOUR savings goal that will help you with your budget. 

Tell me what it is and an estimate of the dollar amount. It can be a car, house, vacation, college, or anything BIG that you hope for in the future. As you complete this module and project, keep thinking of this goal to keep you motivated.

Match

Match the following budget category to the recommended %

• Needs --> Things like rent, car payment, gas, groceries, health insurance, etc

• Wants --> Things like nice clothes, takeout food, movies, video games, gifts for friends/family, etc

• Savings --> Money you put into savings accounts, retirement accounts and/or investment accounts. 

50%

30%

20%

• 50%

• 30%

• 20%

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The 50/30/20 rule of thumb is a set of easy ​

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for how to plan your ​

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. Using them, you allocate your ​

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income to the following categories: ​

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to needs, ​

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to wants, and 20% to financial goals.

Drag these tiles and drop them in the correct blank above

guidelines

budget

after-tax

50%

30%

70%

10%

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Because this is just a guideline for ​

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your budget, you’ll need to supplement it with something to monitor ​

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. The 50/3020 rule was popularized by Senator Elizabeth ​

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and her daughter ​

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Drag these tiles and drop them in the correct blank above

planning

spending

Warren

Amelia

ending

fixing

income

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Here is how it works. (1) Calculate your ​

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income. (2) Calculate your spending threshold for each ​

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. (3) Plan you budget around these numbers. (4) ​

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your budget.  

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monthly

category

Follow

restaurant

weekly

yearly

Open Ended

What is the biggest ADVANTAGE for the 50/30/20 rule and what is the biggest DISADVANTAGE for the 50/30/20 rule? Explain in at least 2 sentences.

Multiple Select

The Zero-Based Budget centers around the principle(s) that… (hint: select 2 correct answers)

• Every dollar in your budget should be categorized

• Your total income should equal your total expenses

• You should only have five categories within your budget

Multiple Choice

When using a Zero-Based Budget, what should you do with any leftover money each month?

• Let it sit in your checking account unassigned.

• Assign it to a category

• Splurge and spend it on a non-essential item

Zero-Based Budgeting: What It Is And How It Works - NerdWallet

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Reorder

Order the 3 steps to start a zero-based budget

• Know your income (how much money do you have to work with?)

• Track your expenses for a few months (to see what amounts you spend on average per category)

• Categorize your expenses (identify your priorities and expenses, including your needs, wants, and savings

1

2

3

• 1
• 2
• 3

Multiple Choice

What rule does Nerdwallet recommend when trying to determine the amounts you put into each category for ZBB?

• 60/20/10 Rule

• 90/10/10 Rule

• 50/30/20 Rule

• Do whatever you want

Multiple Choice

Who SHOULDN'T use this method?

• Someone who makes about the same every month

• Someone whose income is unpredictable from month to month

• Someone who likes to eat nice meals

• Someone who is rich

Open Ended

Open-Ended: What is the biggest ADVANTAGE for the ZBB and what is the biggest DISADVANTAGE for the ZBB rule? Explain in at least 2 sentences.

Multiple Choice

True/False: When using the envelope method. You should create envelopes only for expenses that are variable, meaning they change from month to month. Examples could be groceries, eating out, gas, etc.

Examples of categories you DON’T need envelopes for are fixed expenses that won’t change, like your rent or car payment

• True

• False

Multiple Choice

True/False: People typically spend less when using cash compared to using a card

• True

• False

Multiple Choice

True/False: When using this method, NEVER add more money to your envelope until you have spend your budgeted amount and the envelope is empty.

• True

• False

What Is the Cash Stuffing Envelope Budget System? - NerdWallet

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Reorder

Order the steps to start an envelope system

• Establish categories and limits

• label each envelope

• separate funds

• spend from the envelopes

1

2

3

4

• 1
• 2
• 3
• 4

Multiple Choice

What is the biggest pro to this system?

• Cash is hard to hold at all times

• Some places do not take cash

• It helps you spend less money

Multiple Choice

What is the biggest con to this system?

• It is outdated for a modern world

• It helps you track spending

• It helps you spend less money

Open Ended

Would you be interested in using this method in the future? Why or why not in 1-3 sentences. 

Reorder

Rank what you pay for in order from beginning to last with this method if you used it with the 50/30/20 method

• 20% Savings

• 50% Needs

• 30% Wants

1

2

3

• 1
• 2
• 3

Drag and Drop

The Pay Yourself First Budgeting method prioritizes ​

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in your budget

Drag these tiles and drop them in the correct blank above

savings

needs

wants

flexibility

Pay Yourself First: Reverse Budgeting Explained - NerdWallet

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Reorder

Order the steps for this method

• Assess your spending

• Determine how much to pay yourself using the 50/30/20 approach

• Identify your savings goal

• Adjust as needed

1

2

3

4

• 1
• 2
• 3
• 4

Open Ended

Why is this strategy better for reaching your savings goals instead of trying to save what you have left over at the end of the month?

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There is no "right" budgeting method. It is important to choose a budgeting method or strategy that works best for you.

Of the four budgeting methods presented (The 50/30/20 Rule, The Zero-Based Budget, The Envelope Method, & The Pay Yourself First Method), which do you think would work best for you and your financial goals? Using specific characteristics of this method, explain why this option would work better for you compared to the others.

The Best Budget Apps for 2025: YNAB, PocketGuard and More - NerdWallet

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Poll

Which budgeting app do you want to learn more about? 

• Pocket Guard

• Empower

• YNAB

• Goodbudget

• Honeydue or EveryDollar

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Open Ended

Give me 5 details you learned about this budgeting app from your research. COMPLETE sentences please!

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Share 2 takeaways or tips from the video that could help you spend less and stick to a budget

Multiple Choice

Brian uses the 50/30/20 rule to create his budget. His monthly after-tax income is $4,000. According to this rule, how much should he allocate toward needs, wants, and savings goals? 

• $1,200-needs, $2,000-wants, $800-savings/goals

• $800-needs, $1,200-wants, $2,000-savings/goals

• $2,000-needs, $1,200-wants, $800-savings/goals

• $2,000-needs, $800-wants, $1,200-savings/goals

Multiple Choice

What is an advantage of using The Zero-Based Budget method? 

• You only use cash for purchases, and therefore, typically spend less money.

• An app creates and manages your budget for you, making budgeting easy!

• This method requires you to create only an annual budget, therefore, it is less time-consuming.

• This method encourages you to use every penny of your monthly income & give it a purpose.

Multiple Select

Select the true statements about The Envelope Method of budgeting. (hint: select 2 correct answers)

• The Envelope Method requires you to keep one envelope of cash for all of your fixed & variable expenses.

• The Envelope Method requires you to limit spending to only the money that is allocated into your envelope.

• The Envelope Method requires you to have an app on your phone to track purchases and transactions.

• The Envelope Method requires you to keep separate envelopes for different spending categories.

Multiple Choice

Which of the following is a key advantage of the Pay Yourself First Budgeting Method?

• This method focuses on your values & wants first and needs & savings second.

• There is no way you can ever overdraft your account when using this method

• This budgeting method is very detailed, accounting for every dollar of your income.

• Saving money is prioritized when using this budgeting method.