Hello, everyone.

My name is Ms. Wyatt, and I am so pleased that you could join us here today for our citizenship lesson.

Welcome to today's lesson on how can financial planning support independent living from the unit How can we prepare for financial decision making? By the end of today's lesson, you will be able to explain what you should consider before renting and how you can balance income, spending, and saving.

We have two keywords that we will be using throughout our lesson today, and these keywords are renting and income.

Renting is paying money regularly, usually monthly, to live in a home that you do not own.

Income is the amount of money that a government or a person earns.

Some of these words may be new for you today, but please don't worry as I'm here to guide you.

Our lesson on how can financial planning support independent living is broken up into two parts today, with the first part exploring what should you consider before renting and then looking at how do you balance income, spending, and saving.

When you are ready, let's begin today's lesson.

Renting means paying a landlord regularly to live in a home that you do not own.

This is often the first step to independent living, especially for young people who are moving out of their family home.

So it is common that some young people who are starting to move out of their family home will start to rent, and therefore that means paying money to a landlord regularly.

For example, many students rent shared housing when they go to university.

Before renting, it's important to understand that you are signing a legal contract named a tenancy agreement, and you must follow the rules, including paying rent on time.

According to Shelter, which is a UK housing charity, renters should always check what's included in the rent, such as bills or internet, as this can vary.

So sometimes in a tenancy agreement the rent includes bills and internet, and sometimes it doesn't.

So Shelter has said, make sure you always check what is included in the rent.

When signing a tenancy agreement, you should always make sure you can follow the responsibilities that renting brings.

Your legal responsibility set out by the government include taking good care of the property, paying the agreed rent, paying other charges as agreed with the landlord, for example, Council Tax or utility bills, repairing or paying for any damage caused by you, your family, or friends.

If you don't follow these rules, you can risk being evicted, which means you will be asked to leave the home that you are living in.

So what is not your responsibility when renting? Out of these four options, have a think, what is not your responsibility? Hopefully we said, damage created by the landlord is not our responsibility, but damage created by ourselves, our friends, and our visitors is.

Well done if we got that right.

Renting is not just about paying the monthly rent.

You also have to budget for other costs like a deposit, utility bills, Council Tax, and sometimes service charges.

Planning your income and spending carefully will help avoid debt or missed payments, which could damage your credit score.

Budgeting is vital when renting.

So before renting, it's important to know your rights.

For example, a landlord must protect your deposit in a government-approved scheme like the Deposit Protection Service.

Renters also have a right to live in a safe and well-maintained property.

If something breaks, like the boiler, it is usually the landlord's responsibility to fix it.

Understanding your rights helps renters feel more confident and independent.

So it's really important to know your rights before renting.

The location of your rented home affects both your lifestyle and your budget.

Living close to work or college might mean you pay more for rent, but save money on transport.

For example, for an adult in the West Midlands in April 2025, a bus pass for a year will cost you £700 or £59 a month.

These transport costs need to be included in your financial budget so your income can cover both rent and travel.

So let's have a go at this task.

Fill in the missing words in these sentences.

So we have a tenancy contract is a blank document.

Renters have rights, but these come with blank.

Renters must pay extras like electricity blank.

The person who rents a property is called a blank.

And the blank of your rental property is important, otherwise you might spend too much money on travel.

So pause the video now and have a go at filling in the missing words to these sentences.

Okay, it's time for answers, so let's go through these sentences together.

So number one, a tenancy contract is a legal document.

We should have said legal.

Renters have rights, but these come with responsibilities.

Renters must pay extras like electricity bills.

The person who rents a property is called a landlord.

The location of your rental property is important, otherwise you might spend too much money on travel.

So we should have said legal, responsibilities, bills, landlord, and location.

These were our missing words.

Well done if you got these correct.

For this task, I would like us to have a go at creating five top renting rules for young people.

So Lucas says, "Think about what young people should consider before renting a property." So what are the five top renting rules that we can think of that young people will need before they do actually rent a property? When you are ready, pause this video and have a go at this task.

Okay, good job, everyone.

So your renting rules might have included some of ours.

So we said check what is included in the rent.

Decide if you can agree to the renter's responsibilities.

Always read the contract carefully before signing it.

Make sure the deposit is protected.

Consider transport links and costs within your budget.

So there we go.

There are our five renting rules.

I wonder if your rules are similar or a little bit more different to ours.

We have now explored what should you consider before renting, and it is time to move on to how do you balance income, spending, and saving.

It's important to know how to budget your income and make smart spending choices so you can avoid debt, save for the future, and feel more in control of your finances.

This is particularly important when moving out of home and renting a house, flat, or a room.

Balancing your rent as well as your bills, spending and saving for the future can seem a daunting task when you start to work.

Income is the money you earn from work, benefits, or other sources, so it's the money you get.

It's important to know your total monthly income so you can make a realistic financial plan or budget.

There is a National Minimum Wage, or NMW, set by the UK government for different age groups that can help you work out how much your income might be in your first job.

This amount changes on the 1st of April each year in line with inflation.

So just in case we're not aware, inflation is an increase in the average price of goods and services in terms of money.

Let's have a go at this task.

For this task, we need to put the correct words about income into the bag.

So we have expenditure, earnings, NMW, or National Minimum Wage, 1st of May, 1st of April, balancing, spending, and planning.

So can we remember what are the words that we have discussed so far about income? Can we put these into the bag? Pause the video and have a good go at this task.

Okay, it's time for our answers.

So in our bag we should have earnings, National Minimum Wage, 1st of April, balancing, and planning.

The other words aren't about income, okay? So let's have a look at some National Minimum Wage rates on the 1st of April, 2025.

So as we can see from this table, it depends on the age of yourself.

So if you are 21 years old or over, you can be entitled to £12.

21 an hour for National Minimum Wage.

If you are 18 to 20, it's £10.

If you are under 18, it's £7.

55.

Likewise, as an apprentice you could earn £7.

55 an hour.

Now, you are not entitled to the National Minimum Wage unless you are school-leaving age.

So apprentices are only entitled to the apprentice rate if they are under 19 or in their first year of apprenticeships.

For example, Sandra is 21 and has a full-time job that pays the National Minimum Wage.

She wants to move out and rent a one-bedroom flat so she can start living independently.

Sandra needs to work out her budget carefully to see if she can afford to move out.

Now, Sandra works 35 hours a week at National Minimum Wage, so she's earning £12.

21 an hour.

Her income before tax, so her gross income, is £427.

35 a week, or £1,851.

85 a month, which equals to £22,222.

20 a year.

Sandra's income tax and National Insurance contributions on a salary of £22,222.

20 are as follows from March 2025.

So her gross income is £22,222.

20 as we know, that's what she gets annually.

Now, the personal allowance is £12,570.

The taxable income of that is £9,652.

20.

So this means that she's getting income tax rates at 20%, which is £1,930.

44.

National Insurance also takes £822.

63, which means her take-home pay would be £19,469.

13.

So from her personal allowance, taxable income, income tax at 20%, and National Insurance, that is what she would take home as pay over the year.

"I also have to pay towards my pension," says Sandra.

"I don't have to pay my student loan back until I earn over £26,065 a year.

I pay 5% for my pension so I can save for when I'm older.

My employer puts in 3% too of the pension." So she gets 8% overall.

"After my pension contributions of £1,111.

11, which is 5% of £22,222.

20, and tax, I get approximately £18,358.

02.

Which does Sandra not have to pay from her income due to her current salary? Is it A, income tax; B, National Insurance; C, pension contributions; or D, student loan? Time for our answer.

Hopefully we know that she does not have to pay student loan due to her current salary.

This is because she isn't currently earning the amount that student loan requires her to have before she starts paying it back.

With an annual income of £18,358.

02, Sandra will receive £1,529.

84 a month.

In Sandra's local area, one-bedroom flat costs £700 a month.

She would also have to pay Council Tax at approximately £120 a month, and bills, which will add up to roughly £250 a month.

After rent, bills, and Council Tax, Sandra would have £459.

84 a month to pay for transport, foods, essentials, entertainment, and savings.

So I'm hoping you're starting to see after breaking down her salary, this is what we actually end up with a month.

Sandra says, "I will have to pay £60 in bus fare too, leaving me with £399.

84.

I just don't think I've got enough money left over to live without getting into debt." Sandra decides that she does not earn enough money yet to move out and decides to wait and see if she can get a better paid job or a promotion.

Sandra will plan to move out when she has at least £500 spare after all of her outgoings so she can be confident that she will not get into debt.

It's important to realise the difference between needs and wants when you are spending money and budgeting.

So I wonder if you could think now, what are some of the needs that you have and what are some of the wants that you have? It's easy to confuse what you need with what you want.

For example, you might want a takeaway every week, but when budgeting and saving, you need to buy food for the week from a supermarket, which is usually cheaper.

Planning your spending by separating needs from wants makes sure your income lasts longer.

A good rule is the 50-30-20 rule, which says divide your income as follows.

So 50% goes on needs, 30% goes on wants, and 20% of that goes on savings.

This method is recommended by many banks, building societies, financial experts, and financial education programmes.

So let's check.

A good financial rule is to spend 30% on, is it A, wants; B, needs; or C, savings? Which one was it? If we said wants, we would be correct.

Well done.

Many savings accounts offer good interest rates, and your money is protected with most banks and building societies operating within the UK.

Saving is essential for emergencies and to deal with big life events.

There are many different saving accounts, including an individual savings account, or an ISA, which you do not have to pay tax on.

Your financial plan should change as your income or your needs change.

For example, if you start earning more, you might increase your rent budget slightly or save more.

On the other hand, if your hours are cut at work, you may need to reduce spending.

In 2025, more people are using digital budget planners from different online apps and banks to adjust their plans when needed, explore their investments, and manage their savings.

Keeping your plan flexible helps you stay in control and avoid running out of money.

So your financial plan should change as your income or your needs change.

So let's circle the correct word in these sentences.

Pause the video and take some time to read through these three sentences and circle the right words within them.

Okay, let's go through our answers.

So first one, if your income drops, you should reduce your spending to stay on budget.

Number two, many people use apps to track their spending and adjust their financial plans.

Number three, a good financial plan is always flexible so it can change when your situation does.

Well done if you managed to circle the correct words within these sentences.

For this task, we would like you to write a short advice column giving three pieces of advice to a young person with a Saturday job who keeps running out of money before the end of the month.

Lucas says, "Include examples using words like income, spending, and saving." So let's think, what three pieces of advice would you give to a young person that keeps running out of money before the end of the month? Have a go at writing a short advice column and enjoy.

Okay, so your advice column might look something like as: so we said, "Money SOS: Your Weekly Budget Fix." If you are finding that your money disappears before the end of the month, don't worry, you are not alone.

A lot of people struggle to balance their income, spending, and saving, but with a few simple changes, you can take back control of your finances, and here's how.

So first bit of advice, know your income.

Start by working out exactly how much money you have coming in each week.

That includes wages from a part-time job, pocket money, or any other regular payments.

For example, if you earn £40 a week from your job at a cafe, that's your total income to work with.

Never plan to spend more than you earn.

The next piece of advice is to prioritise your spending.

Make a list of your essential costs first, things like bus fare, lunch money or phone credit.

These are your needs, not wants.

For example, if your bus pass costs £5 and lunch on the day you are working costs £7 a week, that's £12 gone already.

Try to reduce spending on non-essentials like gaming subscriptions or fast food by setting limits and using free budgeting apps.

And then finally, our last piece of advice is always save something.

Even if it's a small amount, saving regularly helps you prepare for emergencies or things you really want.

For example, putting away £5 a week means you could have £60 in just three months.

Use an ISA or a savings account so your money earns interest.

This way, saving becomes a habit and will be easier for when you are older.

Remember, balancing your money isn't about cutting out all the fun.

It's about being smart with what you've got so you can enjoy life and stay in control.

So perhaps your advice column was very similar to ours, but maybe there was also differences in there.

We have now come to the end of our lesson on how can financial planning support independent living.

I would like to summarise it into a few sentences for us.

So renting a home comes with responsibilities like paying rent on time and budgeting for extra costs, such as bills and Council Tax.

Before renting, it's important to understand your legal rights and make sure the property is safe and affordable.

Managing your income means knowing exactly how much money you have and making a realistic plan for spending and saving.

Saving a small part of your income regularly can help you prepare for emergencies or future goals.

Good financial planning helps you stay in control when renting and ensures your income is used wisely, not wasted.

So very important lesson today.

I really appreciate all the hard work and effort that you have put in today's lesson.

Well done.

I hope to see you in the next one.

Bye-bye.