Thinking About Money (3-5)
Students will compare two very different approaches to money—saving for a special purchase and spending money thoughtlessly without a budget, or spending plan. The students will relate this to their own views of money and broaden their understanding of having financial goals.
The learner will:
- participate in discussions about the uses of money.
- identify two uses of money.
- define incentives and describe positive and negative incentives.
- define income, save, spend, goal.
- give examples of short-term and long-term goals.
- compare the use of money in two literature stories.
- A variety of toy banks and pictures of banks of all kinds
- Alexander Who Used to be Rich Last Sunday by Judith Viorst (see Bibliographical References)
- A Chair for My Mother by Vera B. Williams (see Bibliographical References)
- Viorst, Judith. Alexander, Who Used to Be Rich Last Sunday. New York: Atheneum, 1978. ISBN: 0689711999
- Williams, Vera B. A Chair for My Mother. Hong Kong: South China Printing Company, 1982. ISBN: 068804074
Day One: Anticipatory Set: Display some small banks or pictures of them, a three-part bank, and pictures of commercial banks.Ask the children what all these banks have in common.Survey the class as to how many students have their own banks at home. Ask the children: Do they take money out of their banks for spending, and how they get money to put into their banks.Explain that people earn income when they work.Ask how many earn income, by doing work at home or working for someone else? Make a tally (on the chalkboard or chart paper) of the different ways students create income. Set the listening purpose by informing the children that they will hear a story about a boy who receives money but just can’t seem to make wise choices about using it.
Read aloud Alexander Who Used to Be Rich Last Sunday by Judith Viorst (see Bibliographical References).
Introduce the economic concept of incentives by writing the word on the board or chart paper. Tell students that incentives are positive or negative factors that motivate or influence people, such as those that motivated Alexander to spend in this story, or motivated Sam to give in Sam and the Lucky Money.
Positive incentives are like rewards that motivate you to do something.
Negative incentives are like penalties that motivate or persuade you to not do something.
Use a plus (+) sign and a negative sign (-) on the board or chart paper to show visually the two kinds of incentives. Under the + and – signs briefly list some positive and negative incentives at work in your classroom or in the school at large, such as incentives for coming to school, or for reading a book.Discuss with students other examples of incentives in everyday life, such as at home, in buying any good or service, or in the community. Now, turn to the discussion questions below:
- What choices did Alexander have with his income? (he could spend it on goods and services, save it, invest it, or donate it)
- What is the scarcity problem in this story? (Alexander had many wants and could not have everything he wanted because his money was limited) What resources are scarce for Alexander? (money)
- Ask the students to give some examples of unwise decisions Alexander made with his money.
- Ask the students to imagine about how Alexander felt about his use of money? What might he do the next time he gets money? Has anything like this ever happened to them?
- What would you have done with the money?
- In the story we hear Alexander say “Saving is hard.”Is this true? Why? Do you think it is hard for most people to save? Why or why not?
- Why do you think Alexander didn’t choose to donate any of his money?
Additional questions for 3-5th grade students as appropriate:
- What are some possible incentives, positive and negative, that you think Alexander responded to in the story when deciding how to spend his money? (Examples: Positive: enjoyed having more new things, having fun, gum tasted good to him, chance to win a bet) Negative: running out of money, not having money later if he really needed something, criticism from parents for uncontrolled spending, not really needing something and yet paying for it, etc.)
- Where do people often save their money?
- What are some positive incentives that might cause people to save money at a bank or credit union? What are some negative incentives for saving in a bank or credit union?
- What are some positive and negative incentives that motivate people to be philanthropic and to give their time, talent, or treasure for the common good? (Positive: makes a person feel good, provides a sense of belonging, it’s the right thing to do, its fun, gives a sense of purpose, pays back what may have been received, its important to the family, etc. Negative: takes away from other possible, spending, saving, or investing, may not be appreciated, takes too much time or effort, etc.) Why do you think Alexander chose not to donate?
- Once a bank or credit union has your savings deposits, what do they usually do with them? Make sure students understand that banks and credit unions invest monies they receive.Explain that savings deposits are usually loaned out and invested by the bank or credit union in businesses or other consumers in the community.The businesses and other consumers will pay a higher interest rate to the bank or credit union when paying back their loan than the bank or credit union pays to the individual savers who invest with them and expect some interest in return.This differential between what the bank makes on interest from loans and pays out to investors in interest earned is how banks and credit unions hope to make a profit.
Using a four-part bank as a model, remind students that any income not spent on goods and services, or donated to a charitable cause, or used to pay taxes, is considered savings, and that a portin of savings can be invested.
Ask the students: Wouldn’t it help to have a plan of some kind for how you spend your money so you could be sure to spend, save, invest and donate?
Day Two: Look at the jar that the children are using to collect money together. Talk about how much money there is and what could be purchased with that amount of money. Remind them to bring more coins if possible. Set the listening purpose by informing the children that they will hear a story about a little girl who, together with her mother and grandmother, saved money for a special purchase. Like the story of Alexander, this story is about scarcity and spending, but in this story there is some wisely planned saving which helps the family reach their long-term goal.
- Remind students of what a goal is. Explain that goals help us achieve something in the future.
- Ask if they think Alexander in the previous story had a goal. Ask if his goals were short-term or long-term goals.
- Remind students of the two basic kinds of goals, short-term and long-term. Give examples as needed to review and reinforce previous learning from Lesson One. Explain to students that “in this lesson and after we complete this unit, you will learn about smart money choices, and by the end of the year, you will all be much wiser when it comes to spending money on short-term and long-term goals…”
Read aloud A Chair for My Mother by Vera Williams (see Bibliographical References).
Lead a class discussion about the book.
- What is the scarcity problem in this story? List some things that are scarce for the family?
- By choosing to save for the short-term goal of a chair, what do you think might be a possible opportunity cost for Rosa? For her mother? For her grandmother? (Reinforce with students that “choosing is refusing.” Cost does not have to be in money terms; it could be the cost of time, enjoyment, or learning given up.)
- What jobs did Rosa do? What job did her Mama do?
- How did this family use this new, special chair?
- What were some positive incentives that might have motivated Rosa, her mother, and the grandmother to keep saving?
- Do you think saving for the chair was a short-term goal or long-term goal? (Probably short-term, since it took less than a year, but it may have felt like a long-term goal to the family at times)
- How do you think Rosa, who was telling the story, felt about her use of money? What do you think she will do the next time she gets money? Has anything like this ever happened to you?
- How well do you think Rosa in the story handled money?
- What would you have done with your money if you were her?
- What do you think the family will probably do with the empty jar?
- Where in the story did you see evidence of philanthropy?
Why did the community help?
How do people in your neighborhood show they care for one another? Compare A Chair for My Mother and Alexander Who Used to Be Rich Last Sunday. Use the Venn Diagram in Two One to compare information generated from the answers to these questions.
Teacher observation of student participation during class discussion. A written representation using pictures and/or words to illustrate the concepts save and spend.
Strand PHIL.I Definitions of Philanthropy
Standard DP 05. Role of Foundations
Benchmark E.4 Describe the concept of saving for the future.
Standard DP 06. Role of Family in Philanthropy
Benchmark E.2 Identify examples of families supporting giving and sharing.
Strand PHIL.II Philanthropy and Civil Society
Standard PCS 02. Diverse Cultures
Benchmark E.4 Demonstrate listening skills.