Learning to Spend, Learning to Give (9-12)
Students will create a personal spending plan, based on realistic projected monthly income and expenses. Students will also present the money the class collected to the charity of their choice.
Adapt this lesson, and all lessons in this unit, as needed for student level. Specific activities can be omitted or enhanced to meet learner needs.
The learner will:
- identify personal income and expenditures.
- create a personal spending plan/budget reflecting spending, saving, investing, and donating.
- act as a philanthropist by giving money to a charity chosen by the class.
- Student copies, plus a projected version of Handout: My Spending Plan
Invite interested parents and other school and community members, including the media, to be present for the donation presentation to the charity/nonprofit. Invite remarks from families as part of the presentation activities.
- The National Endowment for Financial Education® (NEFE®): a non-profit 501 (c) (3) foundation dedicated to helping all Americans acquire the information and gain the skills necessary to take control of their personal finances.
- Noling, John. Money Smart Children: Financial Literacy and Philanthropy, A Parent Guide. 2006. Learning to Give Press.
- Jump$tart Coalition (www.jumpstart.org) Financial management guides for youth.
- National Teen Resource Bureau (https://www.nefe.org/initiatives/hsfpp.aspx) Money management resources for teenagers.
Day One: Anticipatory Set: Ask for student to name things the class has done or learned thus far in the Money Smart Teens unit regarding: spending, saving, investing, and donating. Explain that today they will consider their own income and expenses, just like nonprofits, by creating a personal “spending plan”.
Draw a circle graph on the chalkboard and divide the circle into four sections – approximately 5% savings, 10% investment, 10% donate, 75% money to spend. Tell students that this is an approximation of how the average person might make their money choices. Discuss with the students how much of the money people earn goes into the different categories. The percentages will vary, but this will give students a general, visual idea. Discuss generally what things teens might save for, invest in, donate toward, and on what things they spend. Ask the students to share ideas for what they might spend, save, invest, and donate. Review why people choose to donate money.
Teacher Note: For the purposes of this lesson, short term refers to saving for things in the coming weeks or months, certainly under a year. Long term typically refers to investing savings for periods longer than three years.
If your students need review of these terms, write the words budget, income, and expenditures/expenses on the board and review the definitions.
Budget - a spending plan to help keep track of money
Income - money coming in from any source
Expenditures-money “going out” (includes all spending, donating, and even saving/investment money going out), also known as expenses.
Hand out Handout One: My Spending Plan! Review the three characteristics of a spending plan. Allow time for students to list their monthly income and expenses on the worksheets. Assist as needed.
Teacher Note: If students do not currently have a source for any personal income, ask them to create an imaginary scenario for use on this spending plan.
After entering income data, ask students what they plan to do with their expenditures. Encourage students to think about something short-term for which they would like to save their money and something else in the long term to invest some other money. (Note the two separate line items on the Monthly Expenses worksheet, one for saving, the other for investments) Remind them that saving/investing typically means.
- learning to live on less than what they have,
- cutting spending on unnecessary wants
- and always includes, of course, an opportunity cost.
Ask students to think about to what charity(ies) or cause they would like to donate some of their own personal money in the future.
Discuss with students the questions at the bottom of Handout One: My Spending Plan. (Optional: Assign questions to small groups and have students share their responses to the class. Encourage the class to contribute to the individual group responses. Use board or chart paper if appropriate.)
Tell students that since a budget is a time-based spending plan (i.e., based on a certain time period), it can be changed, but it should not be changed often. A real attempt to work and live within this budget for the one-month period should be the goal.
Extension: (Optional) “One Month of Spending” Homework Assignment: Ask students to keep track of what they make and spend, every day for the next 30 days, in a journal or small notebook just for this purpose. Ask that students keep the notebook with them and write down every time money is spent by listing amount and what the expense was for. At the end of the month, go back and add up expenses in each category, comparing actual expenditures to the spending plan just created. Ask students to answer these questions in writing:
- How did I do?
- Was spending what I expected?
- If not, was I way off in some areas?
- If I am spending too much, what are my two choices?
Conclude today’s lesson by offering these three suggestions for teens who have a limited supply of income:
- Ask for student discounts. Many programs have discounts for students. If you’re not sure, ask. Showing your student ID may get you savings on movies, transportation and even meals. Every little bit helps!
- Change expensive habits. Take a look at your lifestyle and see what it’s really costing you. For instance, if you buy snacks and soda at school everyday, you may be spending $3 per day on food. That might not seem like much, but it adds up to $1,095 per year. That’s $91.25 a month, just on one habit!
- Think before you spend. Before you make a purchase, consider it carefully. Ask yourself, “Is it a good idea to spend money on this right now?” Think about the big picture. If cash is tight, make sure you can cover the things you really need.
Suggest that it may take a while to adjust spending to their plan, the important thing is to stay with it, since a good spending plan helps you know where your money goes and it keeps you in control.
Conclude today’s lesson by explaining to students that the key to managing money is to “always live below your means”. This skill will help them use their money wisely—for life!
Day Two: Learning to Give
Teacher Note: Prior to Day Two, contact a representative from the nonprofit chosen to receive the class donation. Invite a representative to speak to the class about the organization (such as the mission, budget, career opportunities, new program initiatives, community impact, etc.). If appropriate, have the students make cards, draw pictures, produce a videotape, or write letters to go along with the donation. Involve students in preparing remarks for and making the official presentation of the monies donated on behalf of the entire class.
Anticipatory Set: Write the name of the nonprofit charity, the name of the nonprofit’s representative, and the total amount of the donation on a display area. Introduce the nonprofit representative.
Facilitate, as needed, the presentation and a question and answer session with the representative.
At the appropriate time, involve students in making the official presentation of the money. Allow invited school/community members to make comments if appropriate.
Ask the students and guests to reflect on how the common good has been advanced because of the student’s actions.
Ask students to reflect on making the donation by writing, illustrating, or sharing verbally, how they felt, what difference it made for the common good, and why or why not they might donate in the future.
Teacher observation of student participation Writing assignment of at least three complete paragraphs focusing on personal learning from the unit, analyzing the potential impact of the class philanthropy, or how or why individual behavior may or may not change as a result of the unit when it comes to spending, donating, saving, or investing. Specific writing rubrics should reflect appropriate grade level expectations. The teacher may create a quiz assessing understanding of the vocabulary presented in the unit.
On Day Two, of this, the final lesson in the Money Smart Teens unit, the students “learn to give” by presenting the collected money to the agreed-upon charity.
Strand PHIL.II Philanthropy and Civil Society
Standard PCS 02. Diverse Cultures
Benchmark MS.3 Give an example of how philanthropy can transcend cultures.
Strand PHIL.IV Volunteering and Service
Standard VS 03. Providing Service
Benchmark MS.1 Provide a needed service.
Benchmark MS.2 Describe the goals of the project and their impact.