NGPF Case Study
Budgeting
Spanish version
Virtual Adaptation Ideas
How Do I Budget?
All of Sharon’s friends know who to turn to if they have money questions. Sharon attributes her
financial savvy to the summer jobs she has held over the past four years. These jobs helped her
save a few thousand dollars for college to minimize her student loans. Her friend, Alana,
approaches her the summer before their Senior year of high school, confessing she has a
whopping $56.47 saved for college even after working part-time jobs for the past three years!
Alana asks Sharon what she could do to manage her money more effectively. Sharon’s answer is
one word - budget.
Sharon asks Alana to describe her goals and current spending habits. Alana responds in the
following way:
“College costs a lot more than I thought, and my parents expect me to pay for my living
expenses on campus. Those are going to be around $3,000 per year! I am used to working a
part-time job and going to school, but I'm not sure I can handle both anymore. Budgeting
seems like a great idea, but where do I start?”
Answer This:
1. Alana only has $56.47 saved for college. Brainstorm possible reasons why she has only
managed to save this amount.
Maybe she spends on what i deem as unnecessary expenses
2. What do you think Alana’s goals should be?
To have enough money for college
3. What are a few ways that Alana can get a better understanding of her spending
patterns?
By first knowing What she’s spending, and by looking at Receipts so they can know what she
spends.
[Link] Last updated: 1/2/20
1
Sharon develops a basic plan for Alana to track every dollar she spends over the course of a
month. Alana collects all her receipts in a shoebox and reviews them with Sharon at the end of
the month:
● Coffee: 10 lattes @ $4 each
● Movies: 3 movies @ 10 each
● Food: 4 meals with friends @ $12 each; 20 snacks/energy drinks @$3 each
● Clothes: 3 trips to the mall with friends @ $30 per trip
● Car insurance: Parents make her pay $70/month toward policy in exchange for driving
family car
● Gas for car: 2 fill-ups @ $35 each
● Cell phone: Parents expect her to pay $36/month toward family plan
● Shoes: 1 pair @ $60
To help make sense of all of this information, Sharon asks Alana to organize the information by
using the budget template provided below. In the category column, she will list all of her various
expenses. She will then make a judgment call about whether each expense is a Want or a Need.
In the Monthly Cost column, she will total up the cost for each of the expenses. In the last column,
she will calculate how much that item is as a percentage of her total costs. This should help her
determine where she spent most of her money in the past month.
Complete this chart with the information provided above:
Category Want/Need Monthly Cost % of Total Costs
Coffee want $40 7.94%
Movies want $30 5.9%
Food need 108 21.43%
Clothes need 90 17.86%
Car Insurance need 70 13.89%
Gas need 70 13.89%
Cell phone bill need 36 7.14%
Shoes need 60 11.9%
TOTAL COSTS $540
Alana’s reaction after completing this process is the following:
“Wait a second, Sharon! I think my boss is ripping me off! I work 15 hours a week, on
average, at $11/hour. According to my receipts above, I’m spending much less per month
than I’m earning, but, as we’ve already established, I’ve only got $56 saved up from 3 years
of working. What gives? How do I file a complaint? How do I get my money back? Wait
until I report this boss of mine! I’m putting this on social media!”
[Link] Last updated: 1/2/20
1
Sharon can tell that Alana is angry, but she’s pretty sure her boss isn’t stealing money from her.
Answer This:
5. Do some quick math to compare how much Alana should be making per month and to
compare it to how much she’s spending to determine why Alana’s concerned.
$660 a month.
6. Explain to Alana why she might not want to blast her boss on social media just yet.
Because she is the one that is spending her money, her boss isn’t Doesn’t control Her
spendings.
Once Sharon lends some clarity on Alana’s pay, she feels slightly better, but she’s still really
worried about her initial problem:
“This is going to be extremely difficult for me to cut anything. I mean, I’m working hard, and
think I deserve to enjoy the money that I earn. To save that $3,000 for college, I basically
need to work an extra 25 hours per month. It’s my senior year of high school! I need to focus
on my grades and apply to college. I am so confused!”
Sharon thinks back to where their conversation started last month and how lost Alana seemed.
She hoped that having Alana prioritize her goals and review her spending would help her gain
some necessary perspective, but Sharon realizes Alana is at a dead-end, so her next idea is to
outline a few options for Alana so she can choose a solution that will work best for her.
Answer This:
7. What 2-3 options would you outline for Alana to help her achieve her goals? Be ready to
discuss with her the pros/cons of working more versus finding other ways to adjust her
budget. Be specific with your recommendations, highlighting specific costs or income
sources.
Option 1:Pro: she can stop spending her money on coffee and movies so she can get 70 more
dollars. Con: she can be addicted to coffee and watching movies or seeing something recent.
Option 2: Pro: she can ask her parent To lower her family plan to 10 dollars, and she should at
maximum have 6 pairs of shoes. Con: her parents decline and she likes buying new shoes
because she’s a shopaholic.
Option 3:
[Link] Last updated: 1/2/20
1
[Link] Last updated: 1/2/20
2
