F. Financial Literacy · Money and Finances: Payments, Financial Plans, Budgets, Interest and Smart Spending

Creating a Financial Plan for a Long-Term Goal

F1.2 A1About 45 minutes

Learning goals

I can write a SMART financial goal.
I can find the total cost of a goal, including sales tax.
I can use my income and expenses to decide how much to save each month and how long it will take.
I can check my progress and adjust my plan when something changes.

Words to know

financial plan
A written plan that shows a money goal, what it costs, where the money will come from, how much to save and by when.

long-term goal
A goal that takes a long time to reach, usually more than a year.

SMART goal
A goal that is Specific, Measurable, Achievable, Relevant and Time-bound.

income
Money that comes in, like pay from a job, babysitting money or an allowance.

expense
Money that goes out to pay for something.

buffer
A little extra saved in case something costs more or some income doesn't come in.

Remember from Grade 7

In Grade 7 you created, tracked and adjusted budgets for longer-term goals. A budget shows income, expenses and savings for a period of time, like one month.

A financial plan is bigger. It starts with a goal, then uses budgets, a timeline and check-ins to get you there. In Grade 8 your plan also needs to think about taxes: sales tax on what you buy, and (in the next lesson) taxes on what you earn.

Liam's laptop

Liam is in Grade 8. He wants his own laptop for high school. The one he likes costs $950 before tax. He has $200 saved from his birthday. He babysits his neighbours' kids and gets a little money for extra chores.

Can he afford the laptop by the start of Grade 9, about 14 months from now? A financial plan will tell him.

The steps of a financial plan

Set a SMART goal. Specific (what exactly?), Measurable (how much money?), Achievable (realistic for you?), Relevant (does it matter to you?), Time-bound (by when?).
Find the full cost. In Ontario most things have 13% HST (Harmonized Sales Tax) added at the till. Include it!
Subtract what you already have.
List your monthly income and expenses. The difference is what you can save.
**Work out what you need to save** each month: amount still needed ÷ number of months.
Compare. If you can save at least what you need, the plan works. Add a small buffer if you can.
Make a timeline of where your savings should be each month.
Check in and adjust when things change.

Worked example

Example 1: Liam's plan

Laptop: $950 before tax. HST: 13%. Liam has $200. Time: 14 months. Monthly income: babysitting $80, extra chores $25. Monthly expenses: outings with friends $25, gifts and extras $10. Can he do it?

SMART goal: "I will save $1 073.50 for a laptop by the end of August next year, by saving $65 each month."
Full cost: 13% of 950 = 0.13 × 950 = 123.50. Total: 950 + 123.50 = $1 073.50. (Or 950 × 1.13 = 1 073.50.)
Still needed: 1 073.50 − 200 = $873.50.
Needed each month: 873.50 ÷ 14 = 62.39..., so at least $62.40. Round up so he doesn't fall short.
He can save: income 80 + 25 = 105; expenses 25 + 10 = 35; 105 − 35 = $70 a month.
He decides to save $65 a month and keep $5 as a little cushion for surprises. Check: 200 + 14 × 65 = 200 + 910 = $1 110, which is more than $1 073.50. ✓

Yes. Saving $65 a month for 14 months gets Liam to $1 110, which covers the $1 073.50 laptop with $36.50 to spare (a buffer in case the price goes up).

Liam's plan as a bar model. The whole bar is the full cost with HST. Take away the $200 he has, and split what's left into 14 equal monthly boxes of about $62.40.

Liam's planned savings every 2 months: $200 at the start, then $65 more each month. The dashed line is the goal ($1 073.50). His bar passes the goal at month 14. The bars are drawn to scale.

Worked example

Example 2: Checking in and adjusting

After 6 months, Liam should have 200 + 6 × 65 = $590. But his neighbours were away for a month, so he has only $525. What can he do?

Behind by: 590 − 525 = $65.
He still needs 1 073.50 − 525 = 548.50 in the last 8 months. 548.50 ÷ 8 = 68.56..., so about $68.60 a month.
He can save up to $70 a month (from Example 1), so saving $70 works: 525 + 8 × 70 = 525 + 560 = $1 085. ✓
Other options: earn a bit more (shovel a driveway after a snowfall), wait an extra month, or look for the laptop on sale.

Liam raises his savings to $70 a month and still reaches $1 085 on time. Checking in early made the fix small.

Worked example

Example 3: A family's long-term goal

The Okafor family wants to save $6 000 to visit relatives in 3 years. They already have $1 200. How much should they save each month?

Still needed: 6 000 − 1 200 = $4 800.
Months: 3 × 12 = 36.
Each month: 4 800 ÷ 36 = 133.33..., so $133.34 (round up).

About $134 a month. Spreading a big goal over many months turns it into a manageable monthly amount.

Round up, and plan for surprises

When you divide to find a monthly amount, round up to the next cent (or dollar), or you'll fall a little short. Prices can also go up and income can drop, so a small buffer makes your plan stronger.

Stick with it

Long-term goals take patience. Track your progress on a chart, celebrate halfway, and if you slip, adjust the plan instead of giving up. Setbacks are part of the process, not the end of it.

Just for fun

My goal was to save for a new bike "someday." Then I checked the calendar: Monday, Tuesday, Wednesday... no Someday anywhere. Turns out a goal needs to be time-bound.

Hands-on activity

Write your own financial plan

You need: paper or a spreadsheet, a calculator, and a flyer or website with prices.

Choose a goal that would take at least 6 months to save for (a bike, a camp, a musical instrument, a gift for your family).
Write it as a SMART goal.
Find the price and add 13% HST if it's taxable.
List your realistic monthly income and expenses. Be honest!
Calculate what you need to save each month and what you can save. Does it work? If not, change the time, the goal or your spending.
Make a timeline table: month, planned savings, actual savings (leave the last column blank to fill in later).
Share the plan with your grown-up and ask them to check it with you in a month.

What to look for: tax included, rounding up, a clear timeline, and a plan B if something goes wrong.

Your turn

Rewrite this goal as a SMART goal: "I want to save some money."

A skateboard costs $120 before tax. What is the cost with 13% HST?

You need $600 more in 10 months. How much should you save each month?

Kai's income is $90 a month and his expenses are $30. His goal needs $720 in 12 months. Does his plan work?

Sort into short-term or long-term goals: a movie ticket next week, saving for college or university, a video game next month, a used car at age 18.

Why is it smart to include a buffer in a financial plan?

Ana has $150. Her goal costs $450 including tax. She has 8 months. How much should she save each month?

More practice: warm-up

You need $200 in 4 months. How much each month?

What is 13% of $100?

Is "buy a phone someday" a SMART goal? Why or why not?

Your income is $50 a month and your expenses are $20. How much can you save each month?

You save $15 a month for 12 months. How much have you saved?

More practice: on your own

A bike costs $480 before tax. Noor has $102.40. She wants the bike in 10 months. How much must she save each month?

Ethan starts with $60 and saves $35 a month. How many months until he has $410?

A plan says to save $50 a month for 12 months to reach $600 (starting from $0). After 8 months, Mia has $340. How much is she behind, and how much must she save each month to finish on time?

Owen babysits 3 times a month for $35 each time. His monthly expenses are $45. His goal is $900 (tax included). How many months will it take, starting from $0?

A family saves $250 a month for 2 years for a $5 000 kitchen repair. Are they on track?

Challenge

A laptop costs $1 100 before tax. Priya has $343. Her income is $120 a month and her expenses are $50. She wants it in 12 months. Will she make it? If not, give two ways to fix the plan.

A goal costs $800 before tax today. By the time you buy it, the price has gone up 5%. How much more will you need, including 13% HST?

Ava starts saving $40 a month now. Ben starts saving $60 a month, but 6 months later. After how many months (from now) will they have saved the same amount? How much will each have?

Check your understanding

Quiz

Which is a SMART goal?

A $700 item has 13% HST. What is the total?

You need $500 more in 6 months. What should you save each month?

Income is $110 a month and expenses are $45. A goal needs $60 a month. What is true?

Halfway through a plan you're behind. What is the best first step?

Why is a financial plan for a long-term goal usually broken into monthly amounts?

For parents and teachers

Big idea: Ontario's Grade 8 expectation F1.2 asks students to create a financial plan to reach a long-term financial goal, accounting for income, expenses and tax implications. This lesson covers the plan and sales tax; the next lesson covers income tax and deductions.

How to help at home:

Help your child pick a real goal and write a plan. Keep the amounts realistic for their age.
Share (in general terms) how your family plans for something big, like a trip or a car repair.
Agree on a monthly check-in date. The habit of checking and adjusting matters more than the exact numbers.

Common difficulties:

Forgetting HST or adding 13 dollars instead of 13%.
Rounding down the monthly amount and falling a few cents short.
Unrealistic plans that ignore regular expenses. Ask, "What do you usually spend in a month?"
Giving up after a setback. Encourage adjusting the plan instead. This builds A1 skills like perseverance and planning.