Cost of Living

Lesson Content

• Lesson Plan Template:

  CTE Lesson Plan

• CTE Course Info and Benchmark Notes

  
  

  Program Title (as applicable): Finance

  Course Title: Personal Finance

  Course Number: 8815120

  Career Cluster: Finance

  CIP Number: 0252080110

  Course Type: Career Preparatory

  CTE Standard(s) or benchmarks:

  • 66.03 Develop a personal budget and financial goals.

• Unit Outline

  
  

  This lesson can be used to demonstrate how budgets are needed to make financial decisions. Students can learn about the cost of living in different locations and how it influences budgeting.

• Career Connection

  
  

  Students will create and manage budgets, allocate funds wisely, prioritize expenses, and plan for both short-term and long-term financial goals, all of which are valuable skills applicable in any professional setting.

• Learning Objectives

  
  

  Students will be able to:

  • Make financial decisions by creating a budget.
  • Analyze how different locations affect an employee’s cost of living.
  • Identify factors that affect cost of living.

• Prior Knowledge

  
  

  Students should be familiar with:

  • performing basic arithmetic operations
  • basic financial concepts including income, expenses, and debt

• Guiding Questions

  
  
  • How does budgeting help you analyze the cost of living?
  • How can cost of living help (or hurt) reach your financial goals?

• Procedure

  
  

  1. Open class with a guiding question: What is cost of living? Allow students to share their initial thoughts before facilitating a more directed discussion using the following probing questions:

  • Can we control the cost of living?
  • What factors affect cost of living?
  • Do you think the cost of living is the same everywhere? Why or why not?
  • How can income affect your cost of living?
  • How could you manage your cost of living?

  2. Introduce the idea of using a budget as a way to manage the cost of living. Explain to students that budgets lay out income and expenses (including debt) and provide a way to track your money. Knowing your potential income and expenses before accepting a job or moving to a new location helps you create a budget that can then be used to determine if the job or new location is worth it.

  3. Pass out a copy of the Budgeting Sheet handout to each student. Explain to students that they will purchase grocery items for a month as well as allocate other monthly expenses that a person would incur. They will need to stay within the budget that was provided. (Remind students they must purchase at least one item from each category and have enough food and drinks for a month.)

  • Students will work individually to determine how to use their budget to shop for the items from each location.
  • If technology is available, students can use the Empty Fill-in Sheet attachment to complete their budget.
  • Once students finish, put students in small groups to discuss how they allocated their money and why.

  4. To bring the lesson to a close, discuss the student’s conclusions.

  • How did having a budget alter what you wanted to purchase?
  • What conclusions can you gather for the budget and expenses of each location?
  • Are there other factors that would impact your decision?

• Teacher Notes

  
  
  • Be sure not to oversimplify the cost of living; the cost of living is affected by many factors including but not limited to supply, demand, foreign policy, government regulations, natural disasters, etc.

• Optional

  
  

  Extension Ideas:

  • Students can research different jobs and current prices in their communities to make their own budget.
  • You can show the students that one location is U.S., and another is Venezuela. They can discuss the cost of living in different locations and countries.