Use this scenario to help young people to gain the basic knowledge on personal budgeting and financial education.
When to use it:
Size of the group: 5 to 15 people
Age of the group: over 14 years old
Preparation: 30 minutes
Presentation: 90 minutes
6. While some costs are easily identified as needs or wants, some others can start some debates. For instance, to read books, maybe the participants will identify it as a want, while you might explain that it is a need, as one needs to have access to the right education, so that he/she can have the professional career he/she wants.
7. Continue the discussion, by challenging participants about their sources of incomes/revenues. From where do they get the money? At this age, most of them might say they get the money from their parents / grandparents. Guide the discussion further, so that they can identify different categories of incomes/revenues: salaries, profit made as business, investments, loans, etc. At the same time, provide them with the information of salaries in your country (the minimum wage, the average wage, and how many people receive the minimum or the average wage).
8. Ask them to go back to their monthly expenses-revenues handout, and to calculate their monthly revenues. Then ask them to subtract the expenses from the revenues. As most of the people at this age, their revenues will be much lower than the expenses. Ask them what happens? How do they cover their monthly expenses? They will get to one of both of the ideas: savings or increase their revenues. Explain to them that increasing revenues is hard at their age, or with the first job – as most of the time, in a first job, they will make the minimum or somewhere above the minimum wage.
9. Split the participants in groups of five people, and ask them to share their monthly expenses and find together solutions for savings and reducing costs. After 10 minutes, each group present its ideas of saving. The group with the most ideas of saving will win a small present (such as a box of chocolate).
10. Ask each participant to identify a thing that they want to have or an experience that they want to live, and for which they need a certain amount of money. Ask them to make a plan for the next 6 months or one year to raise the money for what they want to buy. How much they need to save each month? What they should give up from their monthly expenses in order to be able to make the savings? How they can increase their revenues?
11. After 10 minutes, group participants in pairs, and ask them to share their saving plans.
12. Mention to the participants the possibility of using a mobile app for their personal budget and finance (see below – Other resources).
For step 3., if you want to make it more visual, you can use an excel (the graphic function; a pie), and build one of the participant’s monthly budget (expenses); the participants can understand better and visualize how much money they spent on each category.
12 Steps for How to Make a Budget – Personal Budgeting Tips for First Timers
10 Best Budgeting and Personal Finance Apps