ADINA CAMPBELL:'Nearly half of all 20 to 29 year olds in the U.K., 'ended up overdrawn on their bank account in 2011.
ADINA CAMPBELL:'To keep in control of your monthly finances is vital, 'and not just for you and me, but for my colleagues at radio 1 and 1xtra.'
SCOTT MILLS:I am notoriously bad with money. Even now, what I do is kind of give myself pocket money each month in a different account.
TREVOR NELSON:I mentally budget, I don't budget physically. I know roughly when my bills are coming and they are priority. Before you look at that thing you really want, because if you put that at the top of your list, your budget goes out the window.
SARAH-JANE CRAWFORD:One thing that a lot of people don't do, is saving for socialising. So if you then put maybe 5% away for just going out and having a good time, then you get into the mindset of knowing that you are going to treat yourself but you've also got a certain amount of money saved for other things as well. You're not going too crazy.
ADINA CAMPBELL:'So what should we be doing to keep track of our spending? 'One thing experts recommend is drawing up a budget.'
IONA BAIN:A budget is designed to make you think about how much money you've got coming in, whether it's pocket money or even a job, and then think about what you're spending that money on.
IONA BAIN:So if you've got more going out than you have coming in, you've got a problem.
MARTIN LEWIS:The biggest mistake people make is not to do one.
MARTIN LEWIS:The second biggest mistake is to try and look over too narrow a period.
MARTIN LEWIS:Just a snapshot of your finances, rather than thinking, "How much am I going to spend right across the year, and how do I make sure that in those months where I'm not spending as much, I'm putting some aside for the times when I will really need the cash."
ADINA CAMPBELL:All good advice, but what does it actually mean to you?
ADINA CAMPBELL:'Meet Katherine, she's 19 and a student with a weekend job. 'She's got some money coming in 'but needs a bit of help working out where it all goes.'
ADINA CAMPBELL:Now Katherine, do you feel in control of your finances?
KATHERINE McCLUSKEY:I don't.
KATHERINE McCLUSKEY:By the end of the month my money is just gone. I feel like I waste a lot of money on things. I feel like I spend a lot of money in places where I could be a bit more economical.
ADINA CAMPBELL:How much money do you have coming in every month?
KATHERINE McCLUSKEY:I've usually got about 拢650 coming in.
ADINA CAMPBELL:Shall we start writing these down then?
KATHERINE McCLUSKEY:Sure.
ADINA CAMPBELL:'So let's look at Katherine's budget. Her incomings total 拢645 a month. 'But what about her outgoings?'
ADINA CAMPBELL:Let's work out then bit by bit exactly where your money's going every month.
KATHERINE McCLUSKEY:OK.
ADINA CAMPBELL:So getting to uni鈥
ADINA CAMPBELL:'As well as her travel costs, 'Katherine has other expenses like food, clothes and nights out. 'In total, it's 拢617. Leaving just 拢28 a month to spare.'
ADINA CAMPBELL:How do you feel about knowing you've only got a small amount to play with?
KATHERINE McCLUSKEY:I would really like to kind of cut back on a few of the things that aren't completely necessary, so I would have a window for any unexpected costs.
ADINA CAMPBELL:'What Katherine has to do now is separate the expenses she can't cut,' 'like travel and accommodation, from those she can, 'like nights out, lunches and a student's best friend - coffee.'
ADINA CAMPBELL:If you decide not to go out one weekend, that would save you about 拢40, do you think you could do that?
KATHERINE McCLUSKEY:Yeah I could do that.
ADINA CAMPBELL:You're spending 拢100 on lunches.
KATHERINE McCLUSKEY:Yep.
ADINA CAMPBELL:That's about 拢25 a week. Could we save maybe on one or two days of the week, and take in your own lunch?
KATHERINE McCLUSKEY:Yeah.
ADINA CAMPBELL:Do you feel like you need your coffee-a-day, because some people they can't really survive without their morning coffee.
KATHERINE McCLUSKEY:Well, I could bring a flask with me.
KATHERINE McCLUSKEY:It would probably maybe take about鈥
KATHERINE McCLUSKEY:拢10 off that?
ADINA CAMPBELL:拢10?
KATHERINE McCLUSKEY:拢10.
ADINA CAMPBELL:'Using the library could take 拢10 off Katherine's book budget, 'and she could trim 拢15 from her clothes costs. 'After cutting down on non-essentials, 'her outgoings have reduced from 拢617 to 拢522.
ADINA CAMPBELL:'That's increased her spare cash by 拢95, 'giving 拢123 a month to take care of any unexpected costs.
ADINA CAMPBELL:'So Katherine now has an extra 拢95 in her hand.'
KATHERINE McCLUSKEY:It feels so good. It feels so much better knowing that I'm going to have a bit extra aside. Well a lot extra aside by the looks of it.
ADINA CAMPBELL:'Your incomings and outgoings change as you go through life. 'Whether it's pocket money, student loans or a pay packet, 'it's not just about the money you have coming in, 'it's about controlling what's going out.
ADINA CAMPBELL:'But how's it working in practice for Katherine, 'two months after we first met with her?'
KATHERINE McCLUSKEY:I find myself spending money on a lot less things that I don't need, and鈥
KATHERINE McCLUSKEY:Yeah I've been keeping to the budget for the most part. I'm hoping to save up and get festival tickets for the end of the year, so fingers crossed that I've saved up enough for that.
Adina Campbell helps student Katherine take charge of her finances by creating a budget.
They discuss essential and non-essential expenditure and work out ways to reduce spending.
This clip is from the series Made of Money.
Teacher Notes
Discuss what is meant by budgeting.
Give students some examples of people with different budgets.
Challenge them to work out how much each person could afford to spend on essentials and luxuries.
They could investigate common expenditure such as typical rental or mortgage rates in their local area, the cost of monthly bills, and food prices.
Which characters have spare money left over each month? Which characters are struggling to afford their essentials? What could help them?
Students could keep a log of their own income and spending.
Try using spreadsheets, graphs and other representations of data to examine their income and expenditure over a certain period of time.
Curriculum Notes
Suitable for teaching Maths at KS3 and GCSE in England, Wales and Northern Ireland and National 4 and 5 in Scotland.