We save money to get things we can’t afford to buy now. Saving for the future requires patience but it can be worth it when we get what we want the most. Successful savings depends on three elements which are presented to students as the ABCs of saving. A is for Aim: setting a goal. B is for Bank: creating a place to put savings. C is for Coins and currency: making saving money a habit. Students participate in an activity in which they must distinquish between short-term and long-term goals. In a second activity, they discover that when they decide to save for a future goal, they are giving up the opportunity to buy something now. What they give up is their opportunity cost—the thing they wanted second most. The well-known fable about The Grasshopper and the Ants helps illustrate this point. Big Banks, Little Banks (http://???) can be used as a follow-up lesson introducing students to the advantages and disadvantages of different savings places.
The students will be asked if they have ever wanted to buy something but didn’t have enough money? They will be told this is a problem that people of all ages have. One solution is to set aside small amounts of money until you have saved enough to buy what you want. In this lesson, you will identify the steps to being a successful saver and learn how saving for tomorrow requires giving something up today.
- Identify the steps for success in saving.
- Give examples of how saving for the future means giving up things today.
- Set a savings goal and develop a plan to reach it.
Short Term or Long Term?: This is an interactive drag and drop activity that will help students learn about short term and long term goals of saving.
Short Term or Long Term?
Learn How to Create A Savings Place: This interactive story provides information on how to start a place to save money.
Learn How to Create A Savings Place
The Fable about the Ants and the Grasshopper: This site tells the story about the Ants and the Grasshopper.
The ABC's of Saving: Using this activity, you can have students record their goal and plan for achieving it.
The American Savings Education Council: The ASEC offers a Piggy Bank Wrapper that can be downloaded, printed and attached to a coffee can. A space is provided for a student to draw or glue on a picture of their goal.
Ed's Bank: Ed's Bank is an interactive saving and shopping cartoon game.
The Credit Union National Association: The CUNA offers the Googolplex Saving Calculator where students can determine how long it will take to save for their goals.
[Note to teacher: The reading ability of your students will determine how you use the flash file. Older students will be able to open the file and read it it independently. For younger students, project the flash file using an LCD projector or television monitor and read the text to students. Regardless of how the information is presented, be sure to emphasize the ABCs of savings by pointing out A is for Aim, B is for Bank, and C is for Coins and Currency. The students will be told the following. This text can be found in the flash activity Learn how to create a savings place.]
Set a Goal. The first step to saving is deciding on a goal that you want to save for. It might be a toy for yourself, a gift for a friend, or money to spend on a trip you plan to take.
Things that don't cost much money and take only a few weeks or months to save for are called short-term goals. Saving money to go to the movies or to buy a small toy are short-term goals.
Things that cost more money and take longer to save for are long-term goals. Saving for a bicycle or a video game player are common long-term goals for kids. A long-term goal for an adult might be a new house, a car, or paying for college.
Remind yourself of your goal by putting a picture of it in a place where you will see it everyday. On a door or a mirror in your room are good places.
Have your students choose the "Short-Term or Long-Term?" activity to learn about other short-term (less time to save for) and long-term goals (more time to save for).
[Note to teacher: Long-term and short-term are relative terms. Reinforce the idea that long-term goals cost more money and take longer to save for than short-term goals. If students are having difficulty with this activity, suggest students consider items that cost less than $10 which most might be able to save in a few weeks as short-term goals while items that would require they save for many months or even years are long-term goals.]
Create a Savings Place. Next, you will need to create a place where you will put your savings. A piggy bank, can, or jar will work. A clear glass container will let you watch your savings grow.
To resist the urge to spend your savings, you may want to ask an adult to hide some of the money you have saved in a safe place. If you need to save a lot of money for a long time, you can ask an adult to help you set up a savings account at a bank or credit union.
Access the above information via a flash file here. This can be viewed by students via a wall projector and read aloud by the instructor.
Coins and Currency
Make Savings a Habit. Now you are ready to start saving. Do you get an allowance or money for doing chores? If you do, make it a habit to put some of the money in your bank before you are tempted to spend it. When you get money as a gift, put this money in your bank too.
The trick is to save as much as you can whenever you can. Before you know it, you'll have enough saved to buy something you are dreaming about!
Read the story about the ant and the grasshopper . Find out how the grasshopper learned about the importance of saving.
THINK ABOUT IT
The following questions about The Ant and the Grasshopper should also be discussed and reflected upon with your students.
- What were the ants saving for? [Food for the winter]
- What did the ants give up? [Time playing or relaxing]
- What was the grasshopper's opportunity cost? [Food for winter]
- What have you had to give up to get something else? [answers will vary]
As a class, discuss the following questions. Younger students can read along with the teacher during the class discussion. You may want to have older students work independently prior to the discussion preparing written answers. Explain to students that opportunity cost is the thing they give up when making a choice.
- What is saving? [Money set aside for the future and not spend on goods and services in the present.]
- Why do people save? [To buy something in the future that they can't afford today.]
- Why is it important to establish goals? [ So you aren't tempted to spend your money today and stay focused on what you really want.]
- What are your short-term savings goals? [Stuffed animal, small toys, movie tickets, carnival rides, etc.]
- What are your long-term savings goals? [Bicycle, skateboard, summer vacation, video game player, pet, computer, etc.]
- How do people get the money they want to save for their goal? [Most people work to earn money. They might get money as a gift. Some lucky people win money.]
- Where might you get money to save? [Allowance, earn it, gifts, win it, etc.]
- If you have a piggy bank, where could you put it so that you can get it easily and it will not get lost or stolen? [In a closet, under the bed, in a drawer, in a parent's safe, etc.]
Saving for the future requires patience and giving up some things you might want today. But it can be worth it when you get what you want the most.
- Access and download the "Piggy Bank Wrapper ". Print copies for the students to attach to a coffee can so that they can create piggy banks.
Have the students practice their skills of identifying coin values and using a mouse by clicking on and dragging the coins to . The money the students are able to put in Ed’s bank can then be used by the students to go shopping. The students can watch Ed’s quirky reactions as he makes his purchases.
- Have the more gifted students use the Googolplex Saving Calculator to see how long it will take to save for their goals.
Tell the students they are going to create a plan to reach one of their savings goals. Explain that when people set a saving goal it is important to know how much these goals will cost. Provide the students with catalogs and newspaper advertisements for toys and other items they might want to purchase for themselves or others. Guide the students so they choose something that is achievable for their age and available resources.
Have the students record their goal and plan for achieving it using the activity sheet "The ABCs of Saving".
When the students are done, ask them to share their plans with the other students.
As the students report their plans, ask them:
- Is your goal a short-term or a long-term goal?
- What is your opportunity cost?
Post the students’ savings plans on the wall. Arrange them from the least expensive to the most expensive. Discuss why the students have different goals. [They already may already have some things, they like different things and different people value different things.]
At the end of the day, encourage the students to take their picture home and post it someplace where it will remind them of their goal so they aren’t tempted to spend their money on something else.
A few weeks later, ask the students to make progress reports. Discuss what parts of their plans are working and where they are having difficulties. As a class try to come up with solutions to the problems identified.
[Note to teacher: It might be necessary to make further modifications that address the special circumstances of the students.]
Grades 6-8, 9-12