--- title: "Mastermind Lesson 8: Making a Budget" description: Who says building a budget has to be hard? Not us! Now that you've learned everything there is to know about budgets put your skills to use with our worksheets. --- [![RMCULogoColor.jpg](https://rmcu.net/hubfs/RMCU-logo.svg "RMCULogoColor.jpg")](https://rmcu.net?hsLang=en) [Online Banking Login](https://banking.rmcu.net/auth/signin) [Online Banking Login](https://banking.rmcu.net/auth/signin) [![RMCULogoColor.jpg](https://rmcu.net/hubfs/RMCU-logo.svg "RMCULogoColor.jpg")](https://rmcu.net?hsLang=en) - - [Home Loans](https://rmcu.net/home-loans?hsLang=en) - [Personal](https://rmcu.net/personal?hsLang=en) - [Business](https://rmcu.net/business?hsLang=en) - [Membership](https://rmcu.net/membership?hsLang=en) - [Careers](https://rmcu.net/membership/about-rmcu/careers?hsLang=en) - [Contact Us](https://rmcu.net/contact-us?hsLang=en) - Search - [Money Mastermind](https://rmcu.net/money-mastermind-lessons?hsLang=en) - [Financial Counseling](https://rmcu.net/financial-counseling?hsLang=en) - [Savvy Money](https://rmcu.net/membership/financial-education/savvy-money?hsLang=en) - [Blog](https://rmcu.net/blog?hsLang=en) - [Resources](https://rmcu.net/resources?hsLang=en) - [Money Mastermind](https://rmcu.net/money-mastermind-lessons) - [Financial Counseling](https://rmcu.net/financial-counseling) - [Savvy Money](https://rmcu.net/membership/financial-education/savvy-money) - [Blog](https://rmcu.net/blog) - [Resources](https://rmcu.net/resources) - [RMCU Team](https://rmcu.net/membership/about-rmcu/rmcu-team) - [Member Information](https://rmcu.net/membership/about-rmcu/member-information) - [Annual Meeting](https://rmcu.net/membership/about-rmcu/annual-meeting) - [Community](https://rmcu.net/membership/about-rmcu/community) - [Our History](https://rmcu.net/membership/about-rmcu/history) ![RMCU-Mastermind-tag-logo](https://rmcu.net/hubfs/RMCU-Mastermind-tag-logo.svg) Lesson 8: # Making a Budget *Cash. Moola. Cha-Ching.* No matter what we call it, we all make, spend, and save money. While you may recognize the concepts of working, earning, and spending; trying to understand variable expenses, cash flow, and net income can feel like learning a foreign language. This lesson breaks down key terms in budgeting. You will analyze sample budgets and introduces them to the process of creating your own plans for spending and saving. ### Learning Objectives: 1. Understand the components of a budget 2. Create and calculate an individualized budget 3. Keep financial records to assist in planning 4. Demonstrate effective decision making in spending and saving ***Essential Question: “How do I create and follow through with a budget?”*** ### **Investigate: Budgeting and Goals** *\[Time Required: 10 minutes\]* 1. Reflect in your notebook about a time when you (or a friend) shared passwords for online accounts, such as Facebook and e-mail, with friends or boyfriends/girlfriends. Why did they decide to share their passwords? What are the risks involved? Did they have any qualms about sharing private information? Why/why not? 2. Reflect on what the words “***identity, privacy, and theft***” mean mean in relation to your life. Has your identity ever been compromised? Have you ever been victim of theft? How did those experiences make you feel? **Student Preparation: Understanding Cash Flow** *\[Time Required: 15 minutes\]* 1. Record in your notebook what you have spent money on over the last two days. Have you bought any food, clothing, or electronics? Have you gone to the movies with a friend, or bought any groceries or food? 2. There are several types of expenses: **fixed expenses** that are the same each month, such as a rent, phone, or car payment, and **variable expenses**, which change in price and frequency each month, like food or gas. 3. Label your purchases as fixed or variable expenses. How will your goals fit into these categories? If you want to buy a home, will your mortgage be a fixed or variable expense? If you want to take a vacation to Europe, will that be a fixed or variable expense? As you become more independent, more expenses will become fixed. Understand that knowing how money fits into these categories will help you build an accurate budget. 4. Have you earned any money this month (e.g., birthday cash, paycheck or allowance)? How do you keep track of what you make and what you spend? 5. Just like we need to track our outgoing expenses, we also need to track our incoming earnings. This process is called cash flow, and that we monitor it to determine a budget. 6. When you have a job, you earn what is called a **gross income**. This is the total amount of money you earn before taxes. State, federal and social security taxes are all deducted from your gross income (self-employed individuals also pay a self-employment tax). Once taxes are deducted from your gross pay, you are left with what is called **net pay**. This is the actual money you take home and the number you start with when building a budget. ### **Challenge: Making a Budget** 1. *\[Time Required: 35 minutes\]*  1. You will get a chance to study three different budgets showing fixed and variable expenses. Your challenge will be to decide which budget is the most effective in meeting the budgeter’s individual goals. 2. Download the student activity sheet, ***Budget Busters: Who’s Breaking the Bank?*** and evaluate the budgets. Which budget is the most successful in meeting the budgeter’s goals. What adjustments could be made to meet the goal sooner? 3. Download the student activity sheet, ***Budgets 101*** you will now get a chance to create your own budget. **Reflection** *\[Time Required: 5 minutes\]*  Think back to the goals you defined earlier, and reflect in your notebook about how you will use budgeting to achieve these objectives. How much will you need to save? What fixed and variable expenses can you adjust in order to meet your goals sooner? [Back to Lessons](https://rmcu.net/money-mastermind-lessons?hsLang=en) Americans aren’t typically known for their financial responsibility – yet many are already using complex financial strategies. For example, shopping at the mall calls for cost comparisons, and saving for a skateboard requires budgeting. To learn about responsible money management, it’s important to take a look at the building blocks of financial decision-making. In this lesson, we will examine the spending decisions students already make. Then examine real-life spending scenarios and research, analyze, and present their recommendations. #### Learning Objectives: 1. Explore personal financial choices 2. Learn to make informed financial decisions 3. Consider what it means to be financially responsible ![mastermind-icon-lesson-8](https://rmcu.net/hubfs/mastermind-icon-lesson-8.png "mastermind-icon-lesson-8") Worksheet One: ## Budget Busters: Who's Breaking the Bank [Download Worksheet](https://rmcu.net/hubfs/RMCU%20mastermind%20lesson%208%20-%20worksheet%201.pdf?hsLang=en) Worksheet Two: ## Budgets 101 [Download Worksheet](https://rmcu.net/hubfs/RMCU%20mastermind%20lesson%208%20-%20worksheet%202.pdf?hsLang=en) ## [**FOLLOW US ON INSTAGRAM**](https://www.instagram.com/rockymountaincu/?hl=en) - [Privacy Policy](https://rmcu.net/hubfs/DISCLOSURES%20(FILES)/Privacy_Notice.pdf) - [ADA Compliance](https://rmcu.net/ada-compliance) - [Careers](https://rmcu.net/membership/about-rmcu/careers) - [Fee Schedule](https://rmcu.net/hubfs/DISCLOSURES%20(FILES)/RMCU_ScheduleOfCharges_Members_2024-DIGITAL-2.pdf) ![Equal Housing Leader](https://rmcu.net/hs-fs/hubfs/raw_assets/public/RMCU_2022/images/home-lender-logo.png?width=140&name=home-lender-logo.png "Equal Housing Leader") ![American Strategic Insurance](https://rmcu.net/hubfs/raw_assets/public/RMCU_2022/images/asi-logo.svg "placeholder_200x200") Each account is insured by American Share Insurance up to $250,000. 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