Running a Household in 2015 - Budgeting
Today you are going to step into your parent’s shoes and see just what it’s like balancing a
household budget. Sometimes life is easy….you make enough money to cover your bills and
wants and can even save up for that family vacation. BUT, sometimes your kids need braces,
your hours get cut back at work and you get into an accident and you need to buy a new
vehicle.
Running a household is somewhat similar to running a provincial budget or a national budget.
Sometimes the economy is good to you and planning is easy and sometimes the price of oil
drops and all of a sudden making a budget that allows for every need to be met is hard.
You may work in pairs or by yourself [as if you were a dual income household] to make the
decisions on your household budget. Please read your instructions carefully for each step.
Step One: The teacher will assign your group A B or C please circle
Family A:
Person One - Oilfield Worker
● $130 000 after taxes
Person Two - Receptionist
● $30 000 after taxes
Family B:
Person One - Teacher
● $50 000 after taxes
Person Two - Automotive [small engine mechanic]
● $76 000 after taxes
Family C:
Person One - Kitchen Manager [Earls]
● $30 000 after taxes
Person Two - Store Manager [Superstore]
● $ 35 000 after taxes
Step Two:
You are to come up with a budget for your monthly expenses based upon your income for a
family of three - Two adults and one child (2 years old)
Step One: DO NOT GOOGLE.
●
●
Please come up with your initial estimated budget based upon your conversations with
your ‘spouse’. How are you guys going to split up your budget? Where are you going to
spend the majority of your money? You may ask other ‘couples’ how they are splitting up
their budget but you may not use the internet at this point.
Does your budget add up? Or are you over? Under?
Step Two: Fact Check!
Now that you have tallied up your estimated budget do some research.
● Mortgage: Are you renting or do you own? What works for your budget? Go
online and check out the prices of rentals in G.P. What can you afford vs what
you want? [http://www.rentboard.ca/rentals/index.aspx?locid=270 ]
● Mortgage: Are you a home owner? Use the realtor.ca website to look for your
families home. Enjoy shopping for your home. http://www.realtor.ca/index.aspx
● If you are owning a home take the list price and plug it into the link below to find
out what your monthly payment will be.
http://www.investinganswers.com/calculators/loan/mortgage-calculator-what-willmy-monthly-principal-interest-payment-be-2084
● Using the links below & google for help finding out average gas & electric bills in
Alberta etc. until you have fact checked your budget AND developed a new
version that works for your family based upon your income.
General cost of living in Alberta
Cost of living link - Calgary & Edmonton
Cost of living link - Grande Prairie
T.V Internet & Phone
http://www.telus.com/en/ab/index.jsp
http://www.shawdirect.ca/english/
Water
Use the cost of living links to find info
Gas & Electric
Look at a sample bill
Budget Calculator
Income
Person A
Person B
Total
Expenses
Mortgage/Rent
Gas/Electric
Water
T.V/Internet
Phone
Groceries
Gas
Auto Payment
Auto Insurance
Credit Debt
Household
Dental/Medical
Clothing
Entertainment
Child Care?
Savings
Retirement
Total
Estimate
Actual [Fact Check]
Revised Budget
Critical Thinking Questions
1. Were you ever over budget? If so, what changes did you have to make in
order to have a working budget?
2. What was the hardest part of making your budget?
3. Where did you have to make the most ‘cutbacks’ in order for you to
contribute to all sections of your budget?
4. If you had to save up for Christmas presents how would you do so? Be
explicit in what would change in your budget in order for you to have 800$
set aside for holiday season. How long would it take your family to put that
money aside?
5. What would happen if Person Two’s income was cut by 35%? Reconfigure
your budget to see what changes
6. What would happen if your family was a family of four? Reconfigure your
budget. What changes did you have to make as a family? What increased?
What decreased?
7. How would your family pay off $10,000 in credit card debt? How long
would it take your family? What sacrifices would you have to make?
8. How do drastic changes to a family's budget impact the quality of life?
9. What was the biggest learning experience provided by this lesson?
Budget Calculator - Questions 5 - 7
35% decrease in
income
Income
Person A
Person B
Total
Expenses
Mortgage/Rent
Gas/Electric
Water
T.V/Internet
Phone
Groceries
Gas
Auto Payment
Auto Insurance
Credit Debt
Household
Dental/Medical
Clothing
Entertainment
Child Care?
Savings
Retirement
Total
Final Budget
35% decrease in
income
Having two kids
Paying off 10,000
in Credit Debt
10. You will no doubt have to save and plan for big events in your future. Here are
some of the following things you may have to plan for in the future:
Wedding
Vacations
Post-Secondary
Furnish an apartment or house
Down payments [vehicles or house]
Choose one of the above and spend some time researching the costs of your big event. Make a
plan using your budgeting skills to reach this goal. Make sure to include a timeline and the
specific actions you will take in order to achieve this goal.