Beacon Lesson Plan Library

Expensive Choices

Thomas Lucey


Students work in pairs to discover how to prioritize expenses in a budget.


The student understands a variety of factors to consider when making wise consumer decisions (for example, cost, performance, reliability).


-Two copies of the Budget Worksheet from the attached file for each student.


1. Download the Budget Worksheet from the associated file and make 2 copies per student.


1. Read to the students, Expenses are goods and services which people pay for. There are essentially two expense groups: Fixed (the same every month) and Variable (Change Month to Month). Periodic expenses are those occurring occasionally which are budgeted for. When people do not have enough income to pay all their expenses, they can either stop or delay the expenses or try to either increase their income or temporarily borrow money until they have the needed funds. Although many people borrow money, they do not change their spending habits to pay the money back later. Income left over after expenses is called discretionary income. A budget is a spending plan to control your expenses. By controlling expenses, one can control unnecessary debt. Taxes are expenses paid to the Government.

2. Divide the students into pairs.

3. Inform each pair that they are assigned $1,500 for the month.

4. Provide each group with a Budget Worksheet from the associated file.

5. Explain that the accompanying table lists the items students might need during the month, along with estimated costs.

6. Inform the students that they are to complete the worksheet using only the given spaces for expenses. Tell students they are not to have more expenses than they have spaces on the Budget Worksheet.

7. Repeat steps 2-6, requiring students to first assign $150 into Savings as their first expense.

8. Ask the entire class what alternatives they might have to pay for a $500 emergency expense five months later, had they not put money into savings.

NOTE: This lesson also applies to the following Tennessee standards:
Approved by the Tennessee State Board of Education
August 31, 2001

Content Standard: 2.0
Globalization of the economy, the explosion of population growth, technological changes and international competition compel students to understand both personally and globally production, distribution, and consumption of goods and services. Students will examine and analyze economic concepts such as basic needs versus wants, using versus saving money, and policy making versus decision making.
Learning Expectations:
2.3 Understand the potential costs and benefits of individual economic choices in the market economy.
2.4 Understand the interactions of individuals, businesses, and the government in a market economy.


Students will write a composition explaining the process they would follow to decide the
expenses their income would be spent on.

Assessment Checklist:

____ The composition demonstrates that students understand the necessity of saving money.

____ The composition discusses different types of expenses.

____ The composition indicates that students understand the limitations of income on expenses.

____ The composition uses the class activity for support.



- Discuss with the students what expenses might cause some people to be “poor”, even though they may have high paying jobs? How could the students avoid these expenses?

- Have the students research the following taxes. Explain the reasoning, the amount, and the payers of the taxes. Are these taxes worth paying? Why or why not?

Excise Taxes
Sales Taxes
Income Taxes
Capital Gains Taxes
Estate Taxes
Property Taxes
Tobacco Taxes
Alcohol Taxes

-As an supplemental activity, students should research taxes which were assessed over history and their historical consequences. This activity could also be based taxes in other countries.

- Have the class research the expenses of acquiring and using Tobacco and Alcohol
products. They should consider the store price and long-term possible social and medical costs.

-Students may practice solving budget problems with the Supplementary Budget Problems provided in the associated file.

Web Links

NOTE: This website requires a membership that has a small cost per year. It is well worth the expense if your budget allows it.
Cheapskate Monthly

Return to the Beacon Lesson Plan Library.