You know that five dollars you got for your birthday? There are so many things you can spend it on, aren’t there? A toy boat to sail on the pond, a doll to play with or a jump rope. A lot of stores sell the very same things, where should you buy? You are a smart consumer if you pay the smallest amount for the thing you buy. Follow two stories of Josh and then see if you can make the smart spending decision by comparing prices. Everyone must choose. People, rich and poor, young and old, must address the problem of wanting more than they can have. For many people the problem of choice is most apparent when they enter the marketplace as consumers. Children and adults, confronted by a multitude of tempting consumer products, must learn to evaluate the options available to them. But how does one spend money wisely? Consumer educators often use the following suggestions as criteria for spending money wisely. Avoid impulse purchasing Bargain hunt Buy high quality products Use credit sparingly Reflect on which wants are more important than others

KEY CONCEPTS

Budget, Choice, Competition, Consumers, Decision Making, Goods, Price, Savings, Services, Trade-off

STUDENTS WILL

  • Demonstrate that spending is exchanging money for goods and services.
  • Compare the price of a good at more than one store.
  • Recognize that prices are what people pay for goods and
    services.
  • Identify that all consumers have limited budgets and must make choices.

INTRODUCTION

hamsterEveryone must choose. People, rich and poor, young and old, must address the problem of wanting more than they can have. For many people the problem of choice is most apparent when they enter the marketplace as consumers. Children and adults, confronted by a multitude of tempting consumer products, must learn to evaluate the options available to them. But how does one spend money wisely? Follow two stories of Josh and then see if your children can make the smart spending decision by comparing prices. The students will read the two stories: Josh Has Many Wants and Josh Decides to Spend. Then try your hand at comparing prices

Consumer educators often use the following suggestions as criteria for spending money wisely:

  • Avoid impulse purchasing
  • Bargain hunt
  • Buy high quality products
  • Use credit sparingly
  • Reflect on which wants are more important than others

RESOURCES


PROCESS

You may choose to use any combination of the following activities. Two stories with discussion questions are provided, and one 'Smart Buy: Where is the Best Buy?' activity.

Josh Has Many Wants
Read this story to the class.

josh1 Discussion Questions:
1. Name examples of goods in the story. [Milk, apples, bread, cucumber, hamburger, candy, baseball cards, hamster, goldfish.]
2. Name services mentioned in the story [A movie, a carnival.]
3. Who are the consumers in the story? [Josh, Mom, Dad, Nicholas.]
4. Why does Josh want a hamster? [To play with, and because Nicholas has one.]
5. Does Josh experience scarcity? [Yes.]
6. What new word did Josh learn at the pet store? [He learns the world "sale".] What does it mean?
7. What is Josh’s dilemma? [He wants more things than he can afford to buy.]

Josh Decides to Spend
Read this story to the class.

Discussion Questions:
1. Where were Josh and his mother shopping? [At a pet store.]
2. What new friend does Josh make at the pet store? [He makes friends with a hamster.]
3. After Josh buys the hamster, what are some of the other things he will need to buy? [A cage, food, a water bottle, bedding.]
4. What else might Josh wish to buy for his hamster?

Smart Buy: 'Where’s the Best Buy'

Click here for the interactive activity.
Three stores are selling nearly the same goods. Which store has the best price on each item? Compare prices to find the best buy.

Discussion:
It is important to make wise choices when shopping for goods and services. Tell the students they should consider only the goods and services that offer the most satisfaction for the amount of money they want to spend. Remind them that once they purchase an item and spend the money, they lose the opportunity to buy something else with the money they have spent. Make sure that the discussion includes sensible and efficient ways of saving, reasons for saving, and taking advantage of sales or buying two or more of an item at a reduced price.

[Note to teacher: Many teachers wish to ask children to sort choices between 'needs and wants.' However most economists remind us that all goods and services are really wants, because it is very difficult to determine what makes something a need. Needs are largely subjective; people differ greatly in what they regard as needs. You may wish to consider this point in a different way by explaining that that wants can be placed at different points along a continuum of importance. Some wants are more important than others.]

ASSESSMENT ACTIVITY

Smart Choice
Read along with the students as they answer the questions for this interactive activity(whether the decision being made is smart or not smart). Allow enough time for all students to complete each question. Discuss the correct answers with the class, focusing on why the choice is smart or not smart.

CONCLUSION

Young children often want many things they see in stores and they may give little thought to the cost of the things they want. But they can learn to budget the money they have in order to save for special purchases. Even young people can understand that we live in a world of unlimited wants and limited resources, and that choices must therefore be made. They can learn how to do comparison shopping in order to make decisions about good or bad buys. The earlier children begin to think about how they spend their money, the sooner they will become wiser and more satisfied consumers.

EXTENSION ACTIVITY

  1. Ask the students in the class if they have pets. Make a list on the board for students to review. If the students are able, have them do a small amount of research in an encyclopedia about their pet and ask them to find out how much it costs to feed their animal for one week. Students may rank which animals are easy, moderate or hard to care for, as well as inexpensive, moderate, or expensive to feed. It would help to place the answers in a chart like form on the board.

 

EDUCATOR REVIEWS

  • “What a great lesson plan that is filled with multiple activities and scenarios for children to learn from!”

    Anonymous   POSTED ON September 27, 2004

  • “I really like this lesson. I am a high school teacher with a 7 year-old who is studying money. I found the interactive activity to be great!”

    Traci Powell, Evanston, IL   POSTED ON October 28, 2004

  • “I like this lesson. I teach special education (life skills) in a secondary school. Although this lesson deals with pets, we could easily apply the same skills to other things.”

    Jan P., Vancouver, Canada   POSTED ON December 30, 2004

  • “I think this will be very useful with my 1st grade class.”

    Teresa F., Paducah, KY   POSTED ON April 14, 2005

  • “This is a very good lesson.”

    Phyllis   POSTED ON April 8, 2008

  • “I like the lesson and interactive activity.”

    Phyllis   POSTED ON April 8, 2008

  • “I love the interactive activity. I also like that the stories were provided and that I do not have to hunt down books at the local library. The content was on grade level for my 1st graders. EXCELLENT!!”

    Aimee G., Porter, TX   POSTED ON February 21, 2012

  • “I am so happy that someone has taken an interest in an econ lesson plan. I teach students in a self contained special education class, and there are certain standards of learning that I have to teach. I spend A LOT of time looking for ways to teach the material.”

    K A., Marion, VA   POSTED ON January 29, 2013

Add a Review