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Have you ever wished your money could last longer or help you save for something special? Budgeting methods are like tools to make the most of your money, helping you cover your needs, save for goals, and plan for the unexpected. Let's explore some popular budgeting methods and find out how to choose one that works best for you!
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Each of these methods can help you make the most out of what you have, whether it's allowance, chore money, or gifts from family. By the end of this lesson, you'll have the tools to pick a method that fits your goals and lifestyle.
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`embed Exploring Different Budgeting Methods Video`
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- Benefits: Helps you stay in control of your money by ensuring nothing is unplanned.
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- Example: If you have 20 dollars, you might assign 10 dollars to savings, 5 dollars to snacks, and 5 dollars to activities.
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`embed Zero-Based Budgeting graphic`
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:::image type="content" source="../media/zero-based-budgeting.png" alt-text="Screenshot of a section explaining zero-based budgeting." lightbox="../media/zero-based-budgeting.png":::
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Ask Copilot Activity:
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- Prioritize saving money before spending on anything else.
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- Benefits: Builds a habit of saving and ensures you focus on future goals.
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`embed Pay-Yourself-First Budgeting graphic`
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:::image type="content" source="../media/pay-yourself-first.png" alt-text="Screenshot of a section explaining the pay yourself first strategy." lightbox="../media/pay-yourself-first.png":::
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Reflection Activity: Why is saving first important?
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- Use envelopes labeled with spending categories to visually manage money.
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- Benefits: Helps limit overspending and makes budgeting tangible.
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`embed Envelope System Budgeting graphic`
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:::image type="content" source="../media/envelope-system-budgeting.png" alt-text="Screenshot of an explanation of the Envelope System Budgeting method." lightbox="../media/envelope-system-budgeting.png":::
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### Microsoft designer activity: AI-Powered Budgeting with Virtual Envelopes
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1.**Customize Your Envelopes**
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- Use **Microsoft Designer’s AI-powered tools** to generate visuals that match each category.
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- Use **Microsoft Designer's AI-powered tools** to generate visuals that match each category.
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- Add **icons, colors, or images** to make your envelopes visually appealing and easy to understand.
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- Adjust text, font, and layout to personalize your design.
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- Divide income into 50% needs, 30% wants, and 20% savings.
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- Benefits: A simple formula for balanced spending and saving.
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`embed 50/30/20 Budgeting graphic`
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:::image type="content" source="../media/saving-needs-wants.png" alt-text="Screenshot of saving for needs and wants." lightbox="../media/saving-needs-wants.png":::
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Budgeting methods make it easier to manage your money effectively and achieve your goals. They help you prioritize needs, avoid overspending, and build good habits.
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`include graphic that compares all methods`
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:::image type="content" source="../media/saving-helps.png" alt-text="Screenshot of saving helps." lightbox="../media/saving-helps.png":::
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Reflection Activity: Which method do you think would work best for you? Why?
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1. Review the budget Copilot generates, which will divide the income into different spending and saving categories.
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1. Check if the budget aligns with your needs and financial goals.
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1. Ask Copilot: "What adjustments can I make to save more or balance my spending better?"
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1. Modify the budget based on Copilot’s recommendations.
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1. Modify the budget based on Copilot's recommendations.
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1. Write down or save your final budget for future reference.
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1. Consider how you would follow this budget in real life.
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1. Reflect on how budgeting can help you manage money effectively.
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1. Write down or save your updated budget for future reference.
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1. Reflect on how planning for surprises can help you stay on track with your money goals.
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`graphic: comparison chart showing the strengths and weaknesses of each budgeting method`
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:::image type="content" source="../media/set-goal.png" alt-text="Screenshot of set a goal." lightbox="../media/set-goal.png":::
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Budgeting isn't about restricting what you can do—it's about making sure your money helps you do more. By starting small and staying consistent, you can build habits that help you achieve both short-term and long-term goals. Remember, every dollar counts, and the choices you make today can set you up for success in the future.
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