Budgeting and opportunity cost
Every pound spent on one thing is a pound that cannot be spent on something else — that trade-off is called opportunity cost.
Part of your national curriculum
- Financial capability: Understand the concept of a personal budget, opportunity cost, and the balance between managing money day-to-day and planning for the future
Lesson overview
What you'll learn in this lesson
Understand the concept of a personal budget, opportunity cost, and the balance between managing money day-to-day and planning for the future
Key learning points
- • What is a budget?
- • Opportunity cost
- • Balancing now and later
This lesson at a glance
- 22 minutes
- 17 parts to scroll through
- 3 quick checks
- Marked quiz at the end
- Gentle pace: short sittings with pauses
Words to know
Scroll down — the lesson carries on below
Watch & discover
Part 1 of 17
Visual introductionPicture this
Budgeting and opportunity cost
Every pound spent on one thing is a pound that cannot be spent on something else — that trade-off is called opportunity cost.
In a nutshell
Understand the concept of a personal budget, opportunity cost, and the balance between managing money day-to-day and planning for the future
Learning cycle
Part 2 of 17
Learning cycle 1 of 2
Part 1 · What is a budget?
A short piece of teaching, then a check to make sure it has landed.
Explore the idea
Part 3 of 17
Learn
What is a budget?
A personal budget lists income against planned spending over a period, such as a month. It helps someone see whether they are spending more than they earn and where they might need to cut back.
Reset break
Part 4 of 17
Pause
That's sitting 1 of 4 done
Stretch, get a drink, look out of the window. There is no timer and nothing is counting down — your place is saved, so you can come back in five minutes or tomorrow.
Explore the idea
Part 5 of 17
Learn
Opportunity cost
Opportunity cost is the value of the next best alternative given up when a choice is made. Spending £30 on trainers means giving up whatever else that £30 could have bought, such as saving towards a phone.
Quick check
Part 6 of 17
Quick check
Part 7 of 17
Reset break
Part 8 of 17
Pause
That's sitting 2 of 4 done
Stretch, get a drink, look out of the window. There is no timer and nothing is counting down — your place is saved, so you can come back in five minutes or tomorrow.
Learning cycle
Part 9 of 17
Learning cycle 2 of 2
Part 2 · Balancing now and later
A short piece of teaching, then a check to make sure it has landed.
Explore the idea
Part 10 of 17
Learn
Balancing now and later
Good budgeting balances everyday needs, like transport and food, with saving for future goals, like a holiday or emergencies. Setting aside even a small regular amount builds a habit that pays off over time.
Quick check
Part 11 of 17
Reset break
Part 12 of 17
Pause
That's sitting 3 of 4 done
Stretch, get a drink, look out of the window. There is no timer and nothing is counting down — your place is saved, so you can come back in five minutes or tomorrow.
Challenge round
Part 13 of 17
Game · Sort it
Which of these are true?
Drag each card into the right column. Tap a card first if dragging is fiddly.
True
Not true
Challenge round
Part 14 of 17
Game · Fill the gaps
Finish the sentences
Choose the word that belongs in each gap.
A ____ budget lists income against planned spending over a period, such as a month.
____ cost is the value of the next best alternative given up when a choice is made.
Challenge round
Part 15 of 17
Game · Recall cards
What does a personal budget compare?
Card 1 of 3
Mastery quiz
Part 16 of 17
Marked quiz
End of lesson quiz: Budgeting and opportunity cost
3 questions, marked with the reasoning shown. No timer.
1. What does a personal budget compare?
2. What is meant by 'opportunity cost'?
3. Why is it useful to save a small regular amount?
Lesson round-up
Part 17 of 17
Lesson round-up
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Understand the concept of a personal budget, opportunity cost, and the balance between managing money day-to-day and planning for the future