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Grade 6-8

Staying Afloat Financially in the 21st Century

Updated: February 3 2016,
Author: Michael Koren

This lesson will help students identify how to make good decisions which will help them financially in the future. Students will identify how to take their own wants and work them into a form of a personal budget. Students will also discuss various financial scenarios and decide what course of action would be the best to follow.


Students will identify what items in their lives they want. Students will then rank these in order of importance and from that develop a personal monthly budget given a certain income level. Finally, students will analyze various financial dilemmas and discuss how they would resolve each dilemma.

Learning Objectives

  • Identify various items which are important to them and determine if they are wants
  • Develop a monthly budget based on a given level of income
  • Define opportunity cost
  • Explore various financial situations

Resource List


Ask students to make a list of things they  want to have during the next month, use the What Do You Want? worksheet (Printable Version). Then have students prioritize the items on the list. Students should determine how much each item costs. This can be done by estimating or by going to store websites to see prices of the items on their list. Students can also ask adults. Students will use the interactive budget page to make their budget. If the total exceeds $200, students will need to make choices.  Tell students saving money for future spending is also an option.

Introduce the terms shortage and opportunity cost. Ask students what resource is lacking. Tell them that is called shortage, something which is in limited supply. Ask students to begin to cut items from their list to get down to the monthly budgeted amount of $200. Tell them what they give up is called opportunity costs. Ask students to explain why they eliminated certain items from their list. Ask them if this was hard for them to do. Ask them to explain why it was or wasn't hard to do.

Have students share their monthly budget with their classmates.


Tell students making good financial decisions and savings at a young age is a very important ingredient toward financial success later in life. Controlling expenses and saving money help build a solid financial base. Avoiding debt by sticking to a budget is very important. Students should practice these finance skills at a young age to get in the habit of saving, not overspending, and not spending on frivolous items.

Extension Activity

Students will make a budget based on their actual monthly income. This income may come from jobs they do, gifts they receive, and any allowances given by their family. The budget must be a balanced budget.

Students will write a brief summary of the struggles they faced in developing a balanced budget based on their actual income. If students found it easy to balance their budget, their essay should tell why this was the case.

Put students in groups of three. They will create a short play focusing on the need to budget, to develop a balanced budget, and to stick to it.


Tell students they will develop a balanced, monthly budget using the list they created. Students will need to make decisions about what to include in their budget. Stress the importance of savings and of spending on necessities.

After making their budget, students will write a brief essay about the difficulties they faced in making choices to have their budget balance. If they didn’t have difficulties, their essay should focus on why it was easy for them to make a balanced budget.

Students will examine three financial scenarios described below and determine if exceeding their budget would be a good idea. Place students in groups of three or four. After each scenario, students will discuss in their groups what they would do in each situation. Groups will identify the opportunity cost of each decision in each situation. Groups will share their decisions with the class.

Situation One

Bill is interested in being a basketball referee. In order to get certified and known as an official, he needs to attend a camp for basketball officials. At this camp, Bill will learn instruction about refereeing, referee at least four games, be seen by people who assign officials to games from the grade school level through high school varsity level, and meet other officials. If Bill gets hired to games, he will make a minimum of $20.00 a game, possibly more. Bill does not have the $350.00 in his monthly budget to cover the cost of the camp? Should Bill attend the camp?

[Absolutely!!! There is a growing need for officials to work games. Once Bill gets known in officiating circles, he will have opportunities to make thousands of dollars in a basketball season. Even if Bill borrows the money to attend the camp and needs to buy some basic equipment, he will come out ahead in the long run. The opportunity costs is the cost of the camp which is $350.00.]

Situation Two

Sally is looking to buy a five-year-old, used Mustang convertible. It will cost her $9,500.00 to buy the car plus insurance. She believes this car will make her very popular at school, make it easier for to get dates, and will bring a lot of attention her way. Her parents are willing to provide her with a ten-year-old station wagon and will pay for all costs of the this car except the gas Sally uses. Sally has $5,000.00 in her savings account and monthly income of $450.00. Which car should Sally get?

[She should take the station wagon because she can’t afford the Mustang convertible. She also is making assumptions about her improved social life which may or may not be true. The opportunity cost will be possibly being less popular and getting fewer dates.]

Situation Three

Claudio wants to become a teacher. He wants to go to the best school in the state which has a great School of Education. This School of Education has a very positive national reputation and places 85% of its graduates in good paying teacher positions. However, since the school is located on the other side of the state, Claudio would not be able to go to school and live at home. He would have to pay tuition and the cost of living in a dorm, food, and other expenses. The university in his hometown has a School of Education which has an average reputation and places 75% of its graduates in jobs. However, the average starting pay for teachers who attend the local university averages $3,500 a year less than the starting pay from teachers who attended the university with nationally known School of Education. Claudio would have to borrow money to attend the better school and will have about $15,000 in debt after finish college. Should he do this?

[Yes!!! Assuming he is a good teacher, he is very likely to get a job with a high starting salary. Most likely, he will earn significantly more money over his teaching career if he attends the university with a nationally known school of education. While he will be behind in the beginning of his career, he should make this difference up over the length of a long teaching career. Claudio could also apply for scholarships or work-study jobs to help offset some of his debt while attending school. The opportunity cost is being in debt and not being able to do some things for a while since he in debt.]