TOTAL CHILD SCHOOL, PORT HARCOURTWEEK: 4
TOPIC: PERSONAL FINANCE
CLASS: JSS3
GENDER: MIXED
AVERAGE AGE: 12 YEARS
DURATION: 2 PERIODS (40min. for each period)
REFERENCE: WABP junior secondary business studies book 3 and
Classic business studies book 3
BEHAVIOURAL OBJECTIVES: By the end of the lesson, students should be able to:
PREVIOUS KNOWLEDGE: the students have been taught budgeting in their previous class.
Here is one Biblical set on Personal Finance:
Biblical Objective:
To guide individuals in managing money wisely and responsibly in a way that honors God.
Biblical Truth:
God calls His people to practice stewardship, planning, and contentment in their financial lives.
Bible Verse:
“Whoever can be trusted with very little can also be trusted with much.” — Luke 16:10 (NIV)
LESSON CONTENT
STEP 1: PERSONAL FINANCE
Personal finance is the annual income received by individuals from all sources for either consumption or saving.
SOURCES OF FINANCE AVAILABLE TO A HOUSEHOLD
1. Revenue from investment
2. Salaries
3. Pocket money
4. Pension
5. Revenue from trade
6. Gifts and donations
7. Wages
8. Loan
Trying to get the most out of the money you have made or been given without budgeting is like trying to drive to an unfamiliar place without a direction or a road map.
STEP 2: BUDGETING
A budget is an estimate of income and expenditures during a particular time.
If expenditure exceeds income, you have a deficit budget, but if your income exceeds expenditures, you have surplus budget.
USES OF PERSONAL BUDGET
1. It helps one to plan how to live within one’s income.
2. It shows you how you wish to spread your money in each expense category.
3. It helps you to control expenditure
4. It helps you obtain maximum satisfaction from your income as you only spend on things you
have budgeted for.
5. It enables families to communicate their financial condition to all members.
6. It quickly shows you that you have not been saving for emergency periods.
STEP 3: CONSUMPTION AND CHOICE
CONSUMPTION: Consumption is the act of buying and using goods and services.
CHOICE: Choice is a decision to select one thing in preference to others.
SCALE OF PREFERENCE: Scale of preference is the arrangement of our wants according to how important they are.
NECESSITY: Necessity is something that is essential, especially a basic requirement for living.
The necessities of life are:
a. food b. shelter c. clothes d. medical care
STEP 4: MODESTY
Modesty entails having self-discipline to live a simple life.
ATTRIBUTES OF MODESTY
1. Simplicity
2. Living within one means
3. Contentment
EFFECTS OF LIVING MODESTLY
1. Self-control
2. Low tendency of corrupt practices
3. Prudence
People who have no contentment are extravagant; they live beyond their means. Such people run into debts and might be involved in corrupt practices.
Okoro’s Family
Personal Budget for December 2010
Income Expenditure
N N
Husband’s salary 20,000 Food 6000
Wife’s revenue from trading 10,000 Rent 2,500
Gift from Uncle Ben 5,000 Electricity 500
Transport fare 2,000
School fees 700
Petrol for generator 1000
Books 2000
Surplus 14,000
35,000 35,000
This personal budget is an example of a modest budget because the family has a surplus. Okoro’s family can therefore plan to have savings from their income.
Extravagant people have deficits in their budgets because they spend more than they have.
It is also possible to have a balanced budget, where income equates to expenditure. But it is advisable that in planning our personal budget, we should make allowance for surplus so that we can make a saving.
EVALUATION: the teacher evaluates the lesson by asking the students the following question.
ASSIGNMENT
Prepare three personal budgets as follows:
a. a balanced budget
b. a surplus budget
c. a deficit budget