Example of a budget
Everyone will have financial goals in their lifetime. Whether it is to save for the latest iPhone, to buy your first car, or to buy your first apartment, knowing where to look for reliable financial advice and learning how to create a budget are important life skills that everyone should have.
Gross and net income
Task 1
a) In pairs, explain the difference between gross and net income.
b) What type of deductions do people have on their gross income?
c) How would these deductions impact financial decisions?
Financial planning
Task 2
This can be done individually or in pairs.
a) Choose a long-term financial goal that you would like to save for and buy one day. It could be something expensive that you would like to have in the future like a car or an apartment.
b) Suppose your gross income is \$300 per month, create a plan of how you will save the money needed. Consider the following:
- What type of item you will buy. How much will it cost?
- How much will you have to pay in tax?
- What other expenses you have.
- Will you save your money in a bank? If so, are there fees you have to pay?
- How long it will take to save the money.
- You may find this site useful in creating your plan.
c) Now suppose your gross income is \$1200 per month. How will this affect each of your responses to the points listed in part (b)?