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Income Budgeting

Nancy Wyskiel

Contents of Curriculum Unit 80.07.13:

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This unit is intended for middle school teachers with remedial students in grades 78. The unit is approximately for five weeks. The problems involve computations with addition, subtraction, multiplication, and division.

The students I have in my classroom are severely deficient in their basic mathematical skills. In order to create motivation it is important for the students to discover the relationship between classroom mathematics and its applications to everyday experiences. Budgeting an income provides a variety of ways to express this relationship.

Most of my students are from low income families which must function on a strict budget. Many students work daily after school and weekends. Most of the students work during the summer and they can use the money they make then to implement into a yearly budget. I want the students to realize the many ways money can be utilized for saving and spending. For the students without jobs and the knowledge of money I want a realization that money from their parents is not unlimited.

The unit will encompass basic mathematical skills studied in the past and ways to use them in problem solving budget questions. The calculations will involve simple mathematical steps instead of intricate ones that are soon lost. The student section of the curriculum is for remedial reading and mathematics students. I will use the local newspaper periodically in class which is offered free of charge to the students in the New Haven school district.

At the conclusion of the unit the students will have an idea of how much money is needed to survive with a family or independently. An idea will be formed of where the students can afford to live and what miscellaneous extras can be afforded. A realization of all the problems and factors involved in dividing an income will make the students aware of everyday money problems. One of the main goals is for the students to become motivated to learn and stay in school to obtain the skills necessary for a well paying career.

Budgeting an income requires a responsible person to work out how a family or individual will spend their money. Decisions have to be made based on what is of greatest importance to the family. A budget should express where the money is being spent and the areas where one can economize. A frequent review of a budget will help locate these areas. A budget helps people save for expensive items that can’t be purchased with one paycheck. A small amount of savings put away on a regular basis will provide a source for emergency money.

The following questions are examples of the types of questions students should discuss before beginning to write a budget.

1. Why is it advantageous to construct a budget?

2. What should be included in my budget?

3. What will happen to my budget in a crisis situation?

4. Why are so many people with high salary jobs in debt?

5. Why don’t more people use a budget?

6. Should I find a higher paying job to meet all of my budget needs?

7. Are all the items in my budget really necessary?

8. Is thereroom for savings within my budget?

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Student Monthly Budget

ItemsMonthlyWeek 1Week 2Week 3Week 4

(movies, dates)$23$6$4$5$8

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Family Yearly Budget Four Family Members

Items Approximate Estimated
Previous YearPresentActual

(including utilities)$2,400$3,000$3,000

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Budget Items Housing: When considering looking for housing with a family many things have to be taken into consideration. Some examples are the number of children in the family, location, and rents or houses available in your neighborhood. A problem example would be a family of four who likes two different apartments. One of the apartments is only $175 per month but in a poor location, the other apartment is $225 per month in a nicer area. The family has to decide whether to sacrifice within their budget or pay the $225. The reality may be that only $175 can be afforded. Another example is a family that found an apartment within their budget, but it needed painting and other maintenance work, a decision had to be made whether it was worth the time investment. The individuals have to decide what is most important to their housing wants and needs. Before signing a lease for a rent a review should be made of the responsibilities and rights as a tenant.

To introduce housing I would discuss terms used in housing such as lease, tenant, landlord, and mortgage. I would discuss the different types of rents available in New Haven and the difference between a furnished and unfurnished apartment.

The following are sample discussion questions that I would review in class.

1. What is the difference between a furnished and unfurnished apartment?

2. What are your rights as a tenant?

3. What level of maintenance can you expect from your landlord?

4. Who would you call if you felt your landlord was not doing his job?

5. How much can a landlord raise the rent from one year to the next?

After the students became familiar with some of these housing ideas and the questions were discussed I would have a representative from the housing authority speak to the class about equal housing and housing rights. He/she would also discuss the problems which frequently occur in New Haven.

To begin the problem solving aspect I would review how many months in a year and weeks in a month. A diverse set of problems should be introduced, therefore a review of the skills necessary to do the problems should be done first.

The following are examples of housing problems that can be used.

1. The Smith family pays $250 a month for rent. How much money do they pay per year?
2. Rose on an average per month pays $18.76 electric, $14.53 gas, and $200 rent. Susan pays $325 for rent with utilities included. What is the total amount that Rose pays to live in her apartment for one month? How much more does Susan pay even though her utilities are included in her rent?
3. Walt is willing to spend $2,400 a year for an apartment. What is the most he can spend per month?
4. Steve can rent an apartment for $175 per month. If he mows the lawn and shovels the driveway when necessary his landlord will only charge him $150 per month. How much money per year will he save if he agrees?
5. Mary likes an unfurnished apartment for $225 without a stove and another unfurnished apartment for $250 with a stove. Mary knows she can purchase a used stove for $150 which will last about one year. How much money will Mary save in her first year if she has to buy her own stove?
Food: To avoid buying unnecessary items when food shopping make a list in advance. Don’t go shopping while you are hungry or additional items may seem tempting to purchase. A review of local newspapers will help students do comparison shopping. An example of comparison shopping would be to look at the local newspaper and choose two stores in your neighborhood who are having sales. After making your food list decide which store has the best buys for the food items on your list. A store located further away may have better buys, but transportation has to be considered. Fruits and vegetables in season can usually be purchased at a reasonable price. A check should always be made on the expiration date on food items such as milk and meat to guarantee freshness.

Most of the time large quantities of food items you often use such as laundry detergent or milk are less expensive. An 8 ounce box of cereal for 69˘ or a 16 ounce box of cereal for $1.29 is a decision the buyer has to make. If it is an item which is used often and won’t go to waste than the larger box is the one to buy.

For an introduction to food I would discuss the four basic food groups and why they are each important. I would select an item from each basic food group and have the students do comparison shopping from the newspaper ads. I would also take the class on a field trip to a local grocery store to observe the layout of the food products. I would have the manager discuss some of the problems that arise within the store.

The following are sample questions we would discuss with the manager and in class.

1. Did the layout of food items seem to have any patterns?
2. Why is it difficult for the grocery store to maintain maximum freshness on all of their products?
3. How much work is required to shelf all the food items and keep them in stock?
4. Why would or wouldn’t you shop at that particular store?
Before I would introduce the computational problems I would review decimals in addition, subtraction, multiplication, and division.

The following are examples of food problems that can be used.

1. Nancy has $85 per month set aside for food, how much money per week can she spend?
2. Soda is 6 for $1.59 at Stop and Shop. If Larry has $5, how many cans can he buy? How much change will he have left over?
3. Jill buys coffee every morning at work for 40˘. If she brings it from home it costs 17˘. How much money would she save per week if she brought her own?
4. Linda is having a picnic on Saturday. The food cost $2.75 soda, $8.88 hamburger, $2.63 rolls, $6.17 salads, $4.79 paper goods, and $2.79 for icecream. What was the total cost of the picnic? What three items could she have purchased for under $10?
5. Martin’s and Klein’s each have similar prices on the items Judy wants to purchase. Judy has $5 worth of coupons for Martin’s but she lives across the street from Klein’s. Martin’s is 12 miles away from her house at the expense of 15˘ a mile. Which store would cost Judy less money including transportation?
Clothing: Clothes shopping also requires that a list be made of the necessary items. Interchangeable outfits with a mixture of solids and prints can make a few garments seem like many different outfits. Always check the label on the garment for laundering directions before making a purchase. Articles that must be dry cleaned can be very expensive. A beige skirt on sale for $8.99 may seem like a bargain until you begin to pay the cleaners $1.50 per week. Clothing bought in an offseason will be less expensive. Many clothing bargains can be found after Christmas but there will be a smaller selection.

For an introduction to clothing I would have the students make a list of the clothing items they usually purchase for the beginning of the school year. I would again use the newspapers and locate the ads for Macy’s, Malley’s, or a similar store in New Haven. The students would locate items on their list and total the amount of money necessary to make their purchases.

The following are sample questions I would discuss with the class after they made their clothing lists and checked the prices.

1. What clothing item may have to be eliminated and why?
2. What does layaway mean?
3. How does a layaway plan work?
4. Are there any other sources for clothing such as an older sister or cousin?
Examples of the computational clothing problems I would give my students are listed below.

1. Jan bought a pair of slacks for $12.13, a blouse for $16.89 and a pair of shoes for $24.38. What was the total cost of the items she purchased?
2. Mary bought 4 dresses for $29.99 each, what was the total cost?
3. In Sue’s budget she put aside $56 per month for clothes. How much per week can she spend? How much per year?
4. Ellen bought a winter jacket in October for $37.42, the same jacket went on sale in January for $25.50, how much money would she have saved if she waited until January?
5. A windup watch cost $40 and needs to be cleaned every 2 years at $30 a cleaning. A quartz watch cost $100 and never has to be cleaned, but it needs a new battery every year for $2. What would be the total cost of each watch after 10 years?
Transportation: In deciding about bus transportation, the routes near your home and job should be checked. The hours that the buses run is also important. Car transportation is much more expensive and involved. A car involves the price of the car, gas, insurance, registration, tax, tires, parking, and maintenance. Before purchasing a car, a careful budget should be considered to insure that money is available to cover all the expenses.

I would introduce bus transportation to the students by showing them how to use the local bus schedules from Greyhound and Trailways. We would work on examples such as using our school as a starting point and the Peabody Museum as a destination. We would figure out how long it would take to get there and what the total cost would be. Also, we would make a comparison between the prices Greyhound charges with Trailways. Before I began the computational problems I would review adding and subtracting with time. Some of the terms necessary for the students to learn are purchase, route, fare, and schedule.

The following are samples of the types of discussion questions I would review with the class.

1. Which bus company has cheaper rates from New Haven to Hartford?
2. Do you think the gasoline shortage will effect the people with private cars more than people who use the bus daily?
3. When is a car a necessity compared to when it is a pleasure?
4. What are the advantages and disadvantages between a new and a used car?
5. What are car pools and when are they used?
The following are examples of transportation problems that can be used.

1. If your bus fare is 35˘, how much money would it cost to ride the bus oneway for 5 days?
2. A 1980 small car gets 25 mpg, how many miles can it go on 8 gallons of gas?
3. Every 3,000 miles a car needs to have an oil change. If you drove 1,732 miles, how many more miles can you drive before having the oil changed?
4. If on your way to work you spend 50˘ bus fare, 50˘ subway fare, and $3.19 for a taxi, how much would it cost you to get to work and home again for 1 day? For 5 days?
5. Three people car pool to work daily, 2 people don’t have a car. They all live on the same street and meet at the corner. The driver has a compact car that gets 20 mpg, work is located 40 miles away. The 2 people without cars split the gas cost. How much do they pay during a 5 day week?
Insurance: Most employers offer a medical insurance plan to all employees. Sometimes the company pays all or part of the insurance for the entire family. If the company where you work doesn’t have a medical plan you will have to investigate agencies yourself to locate a plan you can afford and one that will insure your family. Other types of insurance are life, house, and crime. The federal government offers crime insurance at a low rate in cities with a high crime rate. Some people don’t realize the importance of insurance until a crisis situation occurs and it’s too late.

To introduce insurance I would bring into class pamphlets describing different types of insurance such as car, medical, and life to compare. I would hold a discussion about the various types of insurance and why they are each important.

The following are sample types of questions I would discuss with the class.

1. Why would a family want life insurance if they had small children?
2. What does disability insurance mean?
3. Why is car insurance so important to every driver?
4. What would happen if you had a car accident and didn’t have insurance?
I would do some introductory problems with the class such as, if your medical insurance is $440 per year, what would your quarterly payments be? Before working on the computational problems I would review the terms such as annual, premium, quarterly, payment, and disability.

The following are examples of insurance problems that can be used.

1. Denise pays $220 a year for car insurance. She makes quarterly payments of how much?
2. John pays $88.80 per year for his insurance. How much per year does he pay?
3. Larry makes monthly payments of $36.43 for car insurance, $12.63 life insurance, and $74.38 medical insurance. What is his monthly insurance total? Yearly?
4. Jay pays $414 for car insurance and Tracy pays $228. How much less does Tracy pay?
5. Crystal makes quarterly car insurance payments of $56 and Joan makes monthly payments of $24. How much more insurance would Joan pay than Crystal after a five year period?
Recreation: Recreational items can range from the movies to a trip to Florida. Unfortunately when a budget needs to be tightened recreational pleasures are cut back. Parks are recreational and are inexpensive sources of family entertainment. There are many public facilities available which are not utilized to the fullest extent. Family recreational equipment is also a good investment such as tennis rackets and yard darts.

I would introduce recreation by asking the class to make a list of the recreational facilities available in the New Haven area and which ones are free. The class would then compare the lists and make one composite list for discussion. If some of the parks were not within walking distance we would review the bus schedules and fares to calculate the cost and bus route. Another way I would introduce recreation is by discussing the cost of rollerskating. My students are interested in this topic because they engage in skating often.

Some example questions concerning rollerskating that I would discuss are the following.

1. What skating rink is the closest to the neighborhood?
2. Which skating rink offers the most entertainment for the price?
3. Is it worth it for you to save money to purchase your own skates or to rent them?
4. When can skating be dangerous?
The following are examples of recreation problems that can be used.

1. Macy’s has a tennis racket on sale for $20.10 and Malley’s has the same racket for $24.39, how much money will you save if you buy the racket at Macy’s?
2. Jim went rollerskating Wednesday for $2.35, to the movies on Friday for $3, and to a dance on Saturday for $4. How much money did Jim spend?
3. Patty spent $28 on camping sites, each night cost $7, how many nights did she camp?
4. Ruby goes swimming 5 days a week for $1.50 per day, how much does it cost her per week?
5. Jan rents rollerskates once a week for $1.50. There is a pair of rollerskates on sale for $24. How many weeks would Jan have to rent skates to equal the price of a new pair?
Savings: Everyone should try to save some money even if they don’t have a special purchase in mind. To open a savings account you should go to a local bank which is convenient for you. A passbook savings account can be opened by simply depositing any savings you have in it. Other than keeping your money at home, a savings account is the next easiest thing, plus you will earn interest on your money.

For an introduction I would take the students on a field trip to a local bank where a bank representative would speak with the students about opening up a savings account. He would also explain the other banking aspects available to the students such as opening a checking account. Upon returning from the bank I would review the following questions with them.

1. How would you open a savings account?
2. Is a checking account necessary for you to open at this time?
3. Would your money be readily available to you if you opened an account at that bank?
4. Do you have anything special in mind that a savings account could help you save for?
Most schools in New Haven have a bank within walking distance or a brief bus ride. Representatives are willing to visit the schools if necessary. Before working on the problems involving computation I would review new terms such as interest, withdrawal, deposit, and balance.

The following are examples of saving problems that could be used.

1. If Mary had $42.56 in her savings account and deposited $6.42, how much does she have now;?
2. If Joe received $1.32 interest in June, $1.46 in July, and $1.59 in August, what was the total amount of interest he earned on his money?
3. Sue withdrew $72 from her savings balance of $96.43, how much money does she have left?
4. Marcy had $408 in her savings account, the bank gave her 78˘ interest, how much does she have now?
5. Joe withdrew $5 a week from his savings account for one year. Mary withdrew $50 a month from her savings account for one year. How much more money did Mary withdraw?

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Enrichment Problems

1. Jan and Dave purchased a home for $85,000, they had to put 15% of the total as a down payment. How much money did they need for a down payment?
2. Ivan earns $842 per month, he is willing to spend 25% of his monthly earnings on an apartment, how much per month is he willing to spend?
3. If a pair of slacks cost $14.98 and the tax is 7 1/2%, what is the total cost?
4. Every month your salary is $650, your monthly car payments are $150, what % of your salary is that per month?
5. If Sue played 12 tennis games, she won 8 and lost 4. What % did she win?
6. Jim makes $450 per month, he saves $75 per week, what % of his monthly salary does he save?
7. What was the % discount on a tennis racket with a regular price of $50 and a sale price of $43?

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Graphs, Lists, Charts, and Surveys

1. Make a list of your wants and needs. Analyze your list. Arrange your need in order of priority.
2. Graph how you spent all of your money last week. (First make a list of the categories and dollar amount for each.)
3. Survey 25 students outside of your class to discover what they spend most of their money on. Make a chart of the results.
4. If you had a job that paid $825 per month and you were living alone, make a monthly budget chart to show how you would spend your money.
5. If you earned $15 per week as a student, make a weekly budget chart to show the items and amount of money spent on each.

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The Basic Objectives

The students will be able to:

1. describe the importance of using money wisely within a budget.

2. identify important aspects of their own budget

3. list important items in a family budget.
4. explain why each item in a family budget is important.

5. solve problems involving budgets using addition, subtraction, multiplication, and division.

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Lesson Plans

Lesson I

A brain storming session to discuss critical items in a family and individual budget should be discussed. The difference between a family and individual budget should also be discussed. The sample discussion questions can be used.

Lesson II

Show students an example of an individual budget. The students should list the necessary items in their own budget and be ready to defend each item. Then give the students a money amount to divide among their budget.

Lesson III

The same as lesson II only use a family budget and discuss why there are more problems when a whole family is using the same budget.

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Annotated Teacher Bibliography

Jones, Wilmer L. Mathematics for Today. (Level Green) New York: Sadlier Oxford, 1979. (Excellent problems for enrichment students.)

Lankford, Francis G., and Goe, William E. Consumer Mathematics. New York: Harcourt Brace Jovanovich, Inc., 1974. (Good source for consumer problem solving questions and ideas.)

Lucier, David and Lucier, Joyann. “An Experience in Everyday Economics,” Arithmetic Teacher, 27,5 (Jan. 80) (Excellent ideas for writing small units.)

Trooboff, Benjamin M., and Boyd, Fannie Lee. Personal Finance for Consumers. New Jersey: General Learning Press, 1976. (A thorough text for learning about personal finance, not for remedial readers.)

Williams, Ed, et al. Mathematics for Today. (Level Blue) New York: Oxford Book Co., Inc., 1976. (Excellent variety of realistic consumer problems.)

Wiltsie, David H. Skills for Everyday Living. (Book 2) California: Motivation Development Inc., 1978. (Good problem solving activities.)

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Annotated Student Bibliography

Bolster, Carey L., et al. Consumer and Career Mathematics. Illinois: Scott, Foresman and Co., 1978. (Good source of questions about consumer items.)

Kravitz, Wallace W., et al. Consumer Related Mathematics. New York: Holt, Rinehart and Winston Pub. Co., 1980. (Excellent general math book.)

Mosenfelder, Donn. Life Skills, Math. New York: Educational Design, Inc., 1980. (Excellent source for problem solving activities.)

Price, Jack, et al. Mathematics for the Real World. Ohio: Charles E. Merrill Pub. Co., 1978. (Good source for consumer math ideas.)

Rucker, Walter E., and Dilley, Clyde A. Heath Mathematics. Massachusetts: D.C. Heath and Co., 1979. (Good source for general math ideas.)

Saake, Thomas F. Business and Consumer Mathematics. California: AddisonWesley Pub. Co., 1977. (Excellent source for problem solving activities.)

Schapiro, Jeri. Dollars and Sense. New York: Scholastic Book Services, 1977. (A very interesting book, thought provoking questions.)

Shaw, Bryce R., et al. General Math I. Boston: Houghton Mifflin Co., 1977. (Excellent text for skill work.)

Usher and Bormuth. Experiencing Life Through Mathematics. Colorado: Pawnee Pub. Co., 1975. (Good source for practical problems.)

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