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Evidence Guide: FNSFLT201A - Develop and use a personal budget

Student: __________________________________________________

Signature: _________________________________________________

Tips for gathering evidence to demonstrate your skills

The important thing to remember when gathering evidence is that the more evidence the better - that is, the more evidence you gather to demonstrate your skills, the more confident an assessor can be that you have learned the skills not just at one point in time, but are continuing to apply and develop those skills (as opposed to just learning for the test!). Furthermore, one piece of evidence that you collect will not usualy demonstrate all the required criteria for a unit of competency, whereas multiple overlapping pieces of evidence will usually do the trick!

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FNSFLT201A - Develop and use a personal budget

What evidence can you provide to prove your understanding of each of the following citeria?

Analyse and discuss budgeting as a financial tool

  1. The role of budgeting in the lives of different groups and the importance of budgeting appropriately to meet expenses is analysed and discussed and related to different stages of life
  2. The importance of setting financial goals is analysed and discussed
  3. Obstacles that might prevent financial goals being achieved are analysed and discussed with the types of behaviours and skills required for successful budgeting explored and analysed
The role of budgeting in the lives of different groups and the importance of budgeting appropriately to meet expenses is analysed and discussed and related to different stages of life

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

The importance of setting financial goals is analysed and discussed

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Obstacles that might prevent financial goals being achieved are analysed and discussed with the types of behaviours and skills required for successful budgeting explored and analysed

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Develop a personal budget

  1. All income and expenses for a six month period are recorded to assist in estimating expenditure requirements
  2. A spreadsheet for recording all budget information is obtained or developed and established to record income and expenditure for a relevant period of time
  3. All sources of income and regular fixed expenses and variable expenses for the specified period are identified and listed in a personal budget using the budget spreadsheet
All income and expenses for a six month period are recorded to assist in estimating expenditure requirements

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

A spreadsheet for recording all budget information is obtained or developed and established to record income and expenditure for a relevant period of time

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

All sources of income and regular fixed expenses and variable expenses for the specified period are identified and listed in a personal budget using the budget spreadsheet

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Implement and monitor the personal budget

  1. The budget is followed according to plan for a period of time
  2. Actual expenses and income for the period during which the budget is implemented are recorded and compared to budgeted expenses and income with any differences in budgeted and actual amounts looked at and the budget modified where necessary
  3. Handy hints for managing the personal budget are discussed
  4. Ongoing review of the budget is conducted to ensure it remains relevant and to ensure updates are incorporated if necessary
The budget is followed according to plan for a period of time

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Actual expenses and income for the period during which the budget is implemented are recorded and compared to budgeted expenses and income with any differences in budgeted and actual amounts looked at and the budget modified where necessary

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Handy hints for managing the personal budget are discussed

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Ongoing review of the budget is conducted to ensure it remains relevant and to ensure updates are incorporated if necessary

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Assessed

Teacher: ___________________________________ Date: _________

Signature: ________________________________________________

Comments:

 

 

 

 

 

 

 

 

Instructions to Assessors

Evidence Guide

The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit

Evidence of the ability to:

explain the benefits and purposes of budgeting

prepare a budget spreadsheet

explain the difference between fixed and variable expenses

prepare and implement a personal budget.

Context of and specific resources for assessment

Assessment must ensure:

competency is demonstrated in the context of the the range statement

access to and the use of a range of common office equipment, technology, software and consumables

access to information about the budgeting process, personal financial records, software and other relevant resources.

Method of assessment

A range of assessment methods should be used to assess practical skills and knowledge. The following examples, in combination, are appropriate for this unit:

evaluating an integrated activity which combines the elements of competency for the unit or a cluster of related units of competency

verbal or written questioning on underpinning knowledge and skills

setting and reviewing simulations or scenarios

group discussion to determine and confirm understanding.

Guidance information for assessment

Required Skills and Knowledge

Required skills

communication skills to:

clearly explain budgeting principles

use questioning to develop clear understanding

liaise with others, share information, listen and understand

use language and concepts appropriate to cultural differences

numeracy and IT skills to:

calculate interest and loan repayments and surplus or deficit funds

use a calculator

useinternet information

literacy skills for interpreting relevant information

learning skills to maintain knowledge of budgeting and saving techniques

Required knowledge

principles of budgeting

role of credit and savings in establishing personal wealth

understanding of the financial institutions and their savings products

Range Statement

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.

The different groups who may budget may include:

families

governments

individuals:

single

married

elderly

students

tourists, travellers.

Different stages of life may include:

approaching and during retirement

buying your first home

moving out of home

starting a family

studying.

Financial goals may include:

accumulating a set amount of money by a specified date in the future for the purposes of:

purchasing assets

financing holidays, educational expenses, home renovations and other known future expenses

establishing a deposit for an investment such as a home or investment property

aiming to repay existing debts and be debt free

establishing a regular savings plan

handling income and expenditure responsibly and avoiding financial difficulties.

Obstacles that might prevent financial goals being achieved may include:

being unemployed, particularly long term unemployed

insufficient income to afford items that are beyond the individual's means

unexpected circumstances such as:

losing a job

falling ill

not being able to work.

Behaviours and skills required for successful budgeting may include:

controlled spending

disciplined approach to money

organisational skills

record keeping skills.

Budget refers to:

a calculation of all projected income and expenditure for period of time (e.g. on a weekly or monthly basis)

showing all projections versus actual income and expenses for the period and monitoring variances.

A spreadsheet may:

be simple or complex depending upon the extent of the individual's finances

have one section for recording all money received as income and another section for expenses both variable and fixed

have a section to record the difference between income and expenses for the period, this being the surplus or deficit financial situation for the period.

Sources of income may include:

interest on investments, dividends

proceeds from sale of assets

social security benefits, pensions, allowances, child assistance

wages, commission, bonuses, tips.

Fixed expenses may include:

fees:

school and university fees

bank fees

insurance

loan repayments (if loan is based upon fixed interest rates) such as:

personal loans

car loans

credit card debts

Higher Education Contribution Scheme (HECS)

public transport

rates

rent

subscriptions to:

magazines

newspapers

clubs

travel including public transport, petrol

Variable expenses may include:

car maintenance

living expenses such as:

food

clothing

medical

loan repayments if loan is based upon variable interest rates

miscellaneous expenses such as:

gifts

recreation

entertainment

fines

mobile telephone

mortgage repayments

utilities such as:

water

gas

electricity

telephone.

Ways to reduce expenses may include:

comparing prices for essential items

monitoring use of utilities such as electricity, gas and water

moving back home

reducing expenditure on discretionary items such as expensive clothing, magazines, eating out

share accommodation

using cheaper modes of transport.

Ways to increase income may include:

combining part-time work with studying

investigating eligibility for student allowances or other relevant government benefits

taking on a part-time job or holiday work.

Handy hints may include discussing:

how to avoid getting into financial difficulties

how to minimise fees and charges imposed by financial institutions

how to use credit card debt effectively

the problems of impulsive buying, particularly when under peer pressure

ways to cut back on spending or change negative spending habits.