Day 2: Building My Personal Budget
Lesson Overview
| Time | 50 minutes |
| Objectives | Calculate monthly net income from a gross annual salary; allocate income across expense categories in a realistic DFW budget; identify where the budget balances or falls short |
| TEKS | d(5)(D) |
| Deliverable | Completed Personal Budget Template with all major expense categories filled in and a calculated balance (surplus or shortage) |
| Materials | Chromebooks, H&L salary data (from Day 1 career choice), printed Personal Budget Template, calculator, DFW cost reference sheet, projector |
Warm-Up (5 min)
WARM-UP: What is the most expensive thing your family pays for every month? Make a guess, no need to ask a parent.
Collect 3-4 guesses. The honest answer is usually rent/mortgage (30%+ of income) or sometimes child care. Bridge: housing is almost always the biggest single expense for most families. That is why budget experts recommend keeping housing below 30% of income.
Activity 1: Teacher Budget Modeling (15 min)
Project a blank Personal Budget Template and build a complete budget on the screen using a sample career. Use Electrician at $52,000/year (or pick a career that few students chose on Day 1 so no one has the same career as your example).
Walk through the math step by step:
Step 1: Gross → Net Income
- Gross annual: $52,000
- Estimated federal + FICA taxes: 25% (≈ $13,000)
- Net annual: $39,000
- Monthly net: $39,000 ÷ 12 = $3,250/month
Emphasize: "This is what you actually take home. Every budget starts here."
Step 2: Essential Expenses (Needs)
Allocate the "needs" first, using real DFW averages:
| Category | Amount | % of Net |
|---|---|---|
| Rent (1BR apt in DFW) | $1,200 | 37% |
| Utilities (electric, water, internet) | $150 | 5% |
| Car payment | $350 | 11% |
| Car insurance | $175 | 5% |
| Gas | $150 | 5% |
| Groceries | $350 | 11% |
| Phone | $75 | 2% |
| Subtotal (Needs) | $2,450 | 75% |
Step 3: Savings and Goals
- Emergency fund savings: $200 (6%)
- Retirement / long-term: $150 (5%)
- Subtotal (Savings): $350 (11%)
Step 4: Wants (Discretionary)
- Leftover: $3,250 - $2,450 - $350 = $450 (14%)
This $450 covers: entertainment, eating out, clothes, hobbies, subscriptions, gym, and anything else.
Facilitation Tip
Stop at each step and ask: "Does this match your priorities from Day 1?" Students who listed "savings" as their #1 priority but allocated only $100 see the gap immediately. This is the first "real life math" moment of the week.
Activity 2: Student Budget Creation (25 min)
Source: H&L career salary data + DFW cost reference sheet
Students build their own budget using the Personal Budget Template and their Day 1 career choice.
Step-by-step for students:
- Write career name and annual salary at the top of the template
- Calculate monthly net income: Salary ÷ 12, then multiply by 0.75 (for taxes)
- Allocate fixed expenses: Rent, car, insurance, phone, use DFW averages from the reference sheet
- Allocate variable expenses: Food, gas, entertainment
- Calculate savings: At least 10% if possible
- Calculate balance: Net income − (expenses + savings) = leftover (or shortage)
Teacher circulates with a 3-check protocol:
- Check 1 (min 5): Has the student calculated monthly net income correctly? (Pull this check early. Step 1 is the math step where calculator errors cascade into every row that follows. Catch them before the budget is half-built.)
- Check 2 (min 15): Have they filled in the fixed expense rows?
- Check 3 (min 22): Does the budget balance (or at least have a clear surplus/shortage)?
Facilitation Tip
Most students, across every salary level, will discover that one version of the lifestyle they imagined on Day 1 does not fit their Day 2 budget. This is normal, not a failure of the career. Frame adjustments as "what would you shift on the lifestyle side?" (smaller apartment, used car, roommate, less eating out) rather than "the career is wrong." The point is trade-off reasoning, not career rejection. Students whose family members work in the career they chose should not leave class thinking that career is a bad choice, the same career supports many real lifestyles.
DOK 3: Based on your completed budget, what specific assumption about your desired lifestyle (apartment size, car choice, food spending, entertainment, phone plan) would have to change for you to save 20% of your income each month instead of 10%? Would that trade-off be worth it to you, and why?
Exit Ticket (5 min)
EXIT TICKET (Comparison Matrix) · Printable PDF:
Use my Day 2 Personal Budget to fill in the matrix.
| $ amount | % of net income | |
|---|---|---|
| Monthly NET income (after taxes) | $_____ | 100% |
| Total NEEDS (rent + utilities + car + food + phone + insurance) | $_____ | _____% |
| Total SAVINGS (emergency + long-term) | $_____ | _____% |
| Total WANTS (entertainment, eating out, etc.) | $_____ | _____% |
Bottom line: Does my budget BALANCE? Circle: YES (surplus) / NO (shortage) / EXACTLY EVEN
My BIGGEST expense category: _____
In one sentence, what would I change if my career paid $500/month LESS? (d(5)(D))
Differentiation
- Support: Provide a simplified budget template with only 5 categories (rent, food, transportation, savings, other). Students focus on allocation rather than detailed categories.
- Extension: Research the 50/30/20 budgeting rule (50% needs, 30% wants, 20% savings). Does your budget match this rule? What would you need to adjust to hit it exactly?
- ELL: Bilingual budget template with Spanish category labels. Teacher modeling is visual and heavy on numbers, accessible across language levels. Pair ELL students with bilingual peers for the calculation steps.