October’s National Financial Planning Month is a great time to help teens learn the
fundamentals of budget planning. Creating, and living within, a budget is an essential adult
living skill that will allow young adults, especially those with special needs, to be successful in
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“Creating a Budget” from Daily Living Skills’ workbook Paying Bills is a good way to set out the
fundamentals of creating a budget. This free lesson offers the basics in budgeting by laying out
the percentages students should pay for each of the major categories of expense associated
with living independently.
Financial experts recommend that people spend no more than 30% of their after-tax income on
housing. Yet, according to the Business Insider*, the average American spends 37% of their
income on house—and more, if they’re young or living in urban areas.
Let this information open up a class discussion on ways to mitigate this trend. What can
students do in the short-term to lower their housing costs? Stay at home? Move to a cheaper
area? Live with a roommate? Create a group home arrangement? Or, what can they do to help
in the future? Elect representatives who endorse affordable housing? Write to representatives?
Join city councils?
Doing the Math
Let students see the real-money cost of housing by looking at the classifieds. Find ads for
several houses or apartments in your neighborhood. Use this formula to determine how much
they’d need to earn monthly to afford the housing and stay within the 30% budget.
Cost of housing = 30 x 100
Cross multiply to get: (Cost of housing X 100) = X times 30
Divide the answer of x(30) into the Cost of housing X100
That answer will be the gross income you need to make to afford the house
Compare this income to the average income students might expect to make at a first job.
For More Information
“Creating a Budget” comes from Daily Living Skills’ workbook Paying Bills. Like other books in
the series, it is written on a 3 3rdrd /4th-grade level with light, airy pages and bullet point information
yet is respectful of teens’ humor and sensibilities while meeting Indicator 13 skills and federal