Elements and Performance Criteria

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.

Different groups who may budget may include:
families
governments
individuals:
elderly
married or unmarried
students.
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.
Spreadsheets may:
be simple or complex, depending on the extent of the individual’s finances
have one section for recording all money received as income and another section for variable and fixed expenses
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 and dividends
proceeds from sale of assets
social security benefits, pensions, allowances and child assistance
wages, commission, bonuses and tips.
Fixed expenses may include:
fees, such as:
bank fees
school and university fees
insurance
loan repayments if loan is based on fixed interest rates, such as:
car loans
credit card debts
Higher Education Contribution Scheme (HECS)
personal loans
public transport
rates
rent
subscriptions to:
magazines and newspapers
clubs
travel, including public transport and petrol.
Variable expenses may include:
car maintenance
living expenses, such as:
food
clothing
medical
loan repayments, if loan is based on variable interest rates
miscellaneous expenses, such as:
gifts
recreation
entertainment
fines
mortgage repayments
utilities, such as:
water
gas
electricity
telephone.
Ways to reduce expenses may include:
comparing prices for essential items
monitoring use of utilities
moving back home
reducing expenditure on discretionary items, such as expensive clothing, magazines and eating out
sharing 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:
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.

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:
identify the benefits and purposes of budgeting
prepare a budget spreadsheet
identify the difference between fixed and variable expenses
prepare and use a personal budget.
Context of and specific resources for assessment
Assessment must ensure:
competency is demonstrated in the context of the range statement
access to and use of a range of common office equipment, technology, software and consumables
access to information about the budgeting process, personal financial records, 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