Managing Money: Budgeting and Beyond
This lesson introduces Year 8 students to the fundamentals of personal finance, focusing on budgeting, understanding payslips, and the difference between credit and debit. Students will learn to prioritise spending and understand the 'real' cost of borrowing money.
Learning objectives
- Distinguish between 'needs' and 'wants' and explain how these impact spending choices.
- Identify common deductions from a payslip, such as Income Tax and National Insurance.
- Calculate a simple budget by balancing income against expenditure.
- Explain the risks and costs associated with different forms of credit and debt.
Lesson plan (60 minutes)
Introduction · 10 min
Starter: 'Need or Want?' card sort/discussion. Students categorise items like bread, Netflix, and heating.
Teaching · 10 min
Direct instruction using the Explainer Script and worked example of a simple budget.
Main Activity · 20 min
Differentiated Worksheet activity: Students work through Support, Core, or Stretch tasks based on prior attainment.
Application · 10 min
Budgeting Challenge: In pairs, students adjust a 'failing' budget to make it balance.
Conclusion · 10 min
Plenary: 8-question multiple-choice quiz and reflection on one thing they will change about their spending habits.
Key vocabulary
- Gross Pay
- The total amount of money earned before any deductions like tax.
- Net Pay
- The amount of money an employee takes home after taxes and other deductions.
- Income Tax
- A mandatory contribution to state revenue, levied by the government on workers' income.
- National Insurance
- A tax paid by workers and employers to fund state benefits and the NHS.
- Debt
- Money borrowed that must be repaid, usually with interest.
Core worksheet (first questions)
- Define 'Gross Pay' and 'Net Pay'.
- Identify two deductions often found on a UK payslip.
- Explain two reasons why someone should try to save money every month.
- If your income is £45 and your expenses are £32, how much is your surplus?
Quiz (sample)
1. What is 'Income'?
- A. Money spent on bills
- B. Money coming in (e.g., pocket money or wages)
- C. The interest paid on a loan
- D. A type of bank account
2. Which two deductions are commonly taken from a UK worker's gross pay?
- A. Income Tax and National Insurance
- B. VAT and Council Tax
- C. Car Insurance and Rent
- D. Energy bills and Water rates
3. What is interest?
- A. A flat fee for opening a bank account
- B. The cost of borrowing money or the reward for saving it
- C. A government tax on luxury goods
- D. The amount of cash held in a vault
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