Hi, I'm Mrs. Wheelhouse, and welcome to our series of lessons on maths and personal finance.

I'm really excited to look at this with you, so let's get started.

By the end of today's lesson, you will be able to plan and budget for your current and future saving and spending.

Now, we're gonna be looking at some keywords today, and these should be familiar to you, but if you need to, feel free to pause now and have a quick read through.

Our lesson has two parts.

We're gonna begin by reviewing spending and budgeting.

Imagine a teenager with a part-time job who lives with their parents or guardians.

What things might they regularly spend their money on each month? Pause the video while you have a think about this now.

Welcome back.

So what did you come up with? Well, you might have said things like socialising, so going to the cinema, bowling, something like that.

You might have said they spend it on food and drink, like when they go to a coffee shop.

You might have said they spend it on their hobbies.

Maybe their mobile phone contract.

Media entertainment.

For example, they might have a subscription to a streaming service.

There might be some other small purchases, like books and games.

You might also have said transport.

Now let's imagine an adult with a full-time job who lives in their own home.

What additional things might they regularly spend their money on each month? So, remember, we're not saying the same things as we said before.

Pause the video while you have a think about this now.

Welcome back.

And what did you put? Well, you might have said something like this.

The rent or mortgage.

Utility bills.

So that means things like electricity and gas.

Council tax.

Groceries.

Regular transport for commuting.

You might have said cleaning products.

After all, clean clothes and a clean house are quite useful.

Now, a budget is a way to manage your money.

It can be used to keep track of your expenditure and ensure that it does not regularly exceed your income.

How you organise your budget may depend on what you tend to spend money on, your financial commitments, and your own personal priorities.

Budgets can be written using spreadsheets, budgeting apps, budgeting websites, or with other financial tools.

A useful starting point when writing a budget can be to review your previous spending.

By looking at what you typically spend money on, you can consider cases where you may be able to spend less or more money in the future.

Items of spending can sometimes be grouped together under a category.

So, for example, rent, utility bills, and council tax might be grouped together as bills.

The TV streaming, music streaming, and video game subscriptions might be grouped together as home entertainment or home media.

Bills are usually a necessary expenditure, so someone who's trying to save money is unlikely to cancel their supply of water.

Home entertainment subscriptions could be considered a luxury expense, so someone who's trying to save money might consider cancelling one of those.

Now, while budgets tend to focus on regular expenditure, there are also times when people make expensive purchases that do not occur regularly.

Some expensive purchases may be items people want, but are not necessary, and they plan to buy them in the future.

For example, a new video game console.

Can you think of any other examples of expensive planned purchases? Pause the video while you have a think about this now.

Did you come up with one of these? I've come up with laptop, television, bicycle, fashion items, and holidays.

Well done if you thought of something else.

Now, other expensive purchases may be items people need and have to buy quickly in response to an emergency.

For example, to replace a broken window.

Can you think of any other examples of expensive unplanned or emergency purchases? Pause the video while you have a think now.

Well, other examples could include a boiler replacement, a fridge or freezer replacement, car repairs, house maintenance.

Well done if you thought of these or your own one.

Now, while these expensive purchases do not occur regularly, you may plan to save money regularly as part of your budget.

That way, you can have money set aside for future expensive purchases.

Let's do a quick check.

Someone is budgeting and looking for ways to save money.

Which of the outgoings could they cancel if they wanted to? Pause the video and make your choice now.

Welcome back.

You should have said monthly magazine subscriptions and a sport TV subscription.

An adult person has a full-time job.

They typically spend 180 pounds a month on travel.

Why might they find it difficult to reduce the amount of money that they spend on travel each month? Pause the video while you have a think, and write down your answer now.

Welcome back.

What did you put? Well, you might have said something like this.

They may need to travel every day to get to work, unless they work from home or within walking distance of their home.

Andeep has a part-time job and earns 22 pounds per week.

The bank statement below shows his expenditure during a single week.

How much did he spend in total during the week? Pause the video while you work this out now.

Welcome back.

You should have said that Andeep spends 26 pounds and 50 pence during the week.

Now, last week, Andeep spent 4 pounds 50 more than his income.

Suggest a way for Andeep to save money next week.

Pause the video and work this out now.

Welcome back.

Now, you may have said that the weekly bus pass might be a necessary expense.

It might be how he travels to the part-time job.

So how could he save money? Well, he might consider not going to the cinema or the cake shop next week.

It's now time for your first task.

Question one.

Sofia has a part-time job that provides her with 185 pounds per month.

The bank statement show Sofia's outgoings in October, which is similar to a typical month.

Part a, by how much did Sofia exceed her income during October? And part b, suggest how Sofia could reduce her monthly outgoings to less than her monthly income.

Pause the video while you work this out now.

Question two.

Write a monthly budget based on an income of 150 pounds per month.

You may use examples of costs to guide you or research costs yourself.

Pause the video and do this now.

Welcome back.

(laughs) Let's go through the answers.

So for part a, her outgoings sum to 225 pounds and 95 pence.

So she's overspent by 40 pounds and 95 pence.

So how could she reduce her monthly outgoings? Well, she could cancel her SportsTV and Acorn Plus streaming services.

And that was just an example.

She could also cancel the SportsTV and stop spending at Oakbucks Coffee.

She could also reduce her guitar lessons to every other week.

Now, remember, these are just examples.

You could have put something different and it will still be correct.

Now, for question two, you had to write a monthly budget.

Again, this is just an example because if you used your own costs, you'll have different things here.

The important bit was to make sure you didn't go over 150 pounds.

It's now time for the second part of our lesson.

We're gonna look at visual representations of expenditure.

This bank statement shows Sofia's outgoings during a month.

In this case, there are only 12 banking transactions.

An adult who has lots of regular expenditure may have hundreds of transactions every month.

How can they keep track of what they typically spend money on? Well, visual representations can be useful for viewing and interpreting large amounts of data, such as hundreds of banking transactions.

Here's some examples.

You could have pie charts or bar charts.

Now, banking or budgeting tools can be used to group transactions together and display them as a pie chart.

In this case, it has made a distinction between two types of shopping.

Groceries refers to food and drinks sold in a shop or supermarket to typically eat at home, whereas shopping refers to items bought.

For example, clothes.

The bar chart shows how much money a person spent during each month of a year.

It can be used to see which months had more outgoings than others.

Some months may have more outgoings due to special occasions or events.

Some months may have more outgoings due to regular annual costs.

Let's do a quick check.

The pie chart shows the typical monthly outgoings of a family.

Starting with the smallest, sort the categories in order of size.

Pause the video while you have a go at this now.

Welcome back.

Let's see what you put.

So you should have had savings, then transport, then shopping, entertainment, groceries, eating out, and then bills.

Well done if you got that right.

Now, the family have found out that their bills are about to increase.

They're writing a budget to ensure that they can afford the bills.

Suggest a way that they may be able to reduce their spending elsewhere.

Pause the video while you have a go at this now.

Welcome back.

Now, this is just an example.

You could have put something else and still be right.

So I've said they could spend less eating out, noting that this could increase the amount they spend on groceries, though.

Now it's time for your final task.

Question one.

A worker earns 2,400 pounds per month.

The graph shows how much money they spent each month during a year.

Part a, they spent the most amount of money when they went on holiday.

In which month did this happen? Part b, in which month did they spend more than their income? And part c, what do you notice about each month after the ones you identified in part b? Why do you think this happened? Pause the video while you have a go at this now.

Question two.

The pie chart shows a family's typical monthly expenditure.

Their total monthly expenditure, including savings, is usually equal to their monthly income.

They want to increase the amount of money that they pay into a savings account each month without causing their outgoings to rise above their monthly income.

Part a, for which categories are they least likely to be able to reduce their outgoings? And then in part b, suggest some ways that they may be able to reduce their outgoings in order to save more money.

Pause the video while you work on this now.

Welcome back.

It's time to go through our answers now.

So for part a, in which month did they spend the most amount of money? Well, that was June, or month six.

In which months did they spend more than their income? Remember, their income is 2,400 pounds each month, so you had to identify the months where they spent more than that.

Well, that was January, March, June, and December.

Or you could have written months one, three, six, and 12.

So what do you notice about each month after the ones we just identified, and why do you think that happened? Their expenditure is less than their income, usually by a similar amount to how much they overspent in the previous month.

This could be a reaction to spending too much in the month before.

For example, if their bank balance went overdrawn, then they might spend less the next month.

Now, in question two, we want to increase the amount of money that's paid into a savings account without causing the outgoings to rise above the monthly income.

Now, for part a, I asked you for which categories are they least likely to be able to reduce their outgoings? You should have said bills, because they're normally fixed.

Transport, because often that's used to get to work.

And possibly you could have said groceries, depending what's typically bought, but it's all right if you didn't put that one.

In part b, suggest some ways they may be able to reduce their outgoings.

Well, you might have said reduce how much they eat out.

Cancel or reduce one of their entertainment packages.

They could consider whether savings can be made with shopping or groceries.

Well done if you put something like that.

It's time to sum up what we've looked at today.

There are a range of ways to plan and keep track of personal finances.

A proactive approach to managing money can be taken if personal finances are tracked and circumstances change.

Budgeting plays an important role in saving for unexpected emergencies.

Well done.

You've worked really well today.

I look forward to seeing you for another lesson in the future.

Goodbye for now.