Making Spending Decisions about Money


LESSON DESCRIPTION

In this lesson, students will learn ways to become mindfully deliberate about their spending choices using the DECIDE process. They will use this model to help them with making a decision for a major spending purchase.

Making spending decisions about how to use your money can be difficult. Sometimes you have to sacrifice what you want now for what you really want afterwards. There might be times when you have to put off your wants to focus on your friend or spouse. There’s rarely an ideal solution and usually trade-offs.

Making decisions concerning cash could be even tougher if you don’t have a steady income. Whatever you can do is make the best choice you can with the information you’ve got at the time.

To help with making decisions, we can use the DECIDE model.


Using the DECIDE steps

The DECIDE model is a tool you may use to help with making decisions. Here are the steps for using the model:

D – Define your Goal
The very first thing to do is to define your goal, the decision that has to be made.

E – Establish Your Choices
Next, you need to research your different choices, and establish your criteria.

C – Consider the Options
As you research options, consider the results of each choice.

I – Identify the Pros and Cons
Identify the pros and cons of each of your options. Take care to identify what’s important and valuable for you so you can make a decision that matches your values and will bring you pleasure.

D – Decide
Make your decision. Once you examine your options and weigh them against your values it’s time to create a decision and act.

E – Evaluate the Results
Evaluate the results of your decision. Reflect on the results of your decision-making process.

PROCEDURE

Have students use the worksheet to complete the DECIDE steps regarding a spending decision about a significant purchase they’re considering in the future. This might be a decision for the student or the student’s family.

Some possible topics for students decisions might be deciding courses, picking out a summer job, dealing with relationships, picking participation in school or community activities, buying a new cell phone.

For a family decision, speak to all pupils individually to be certain they’ve identified a legitimate household decision. Some examples might be, moving, large purchase such as a house or car, deciding how to spend the holiday, etc.

GRADE LEVEL

7-12, Young adults

CONCEPTS

  • The DECIDE model for decision making
  • Making spending decisions
  • Personal finance

OBJECTIVES

Students will:

  • Understand what influences spending decisions.
  • Learn to use the DECIDE model.
  • Identify ways to improve their spending decisions and behavior.
  • Identify sensible vs. unwise spending
  • Prioritize spending decisions

TIME REQUIRED

20-30 minutes.

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Planning Effective Financial Goals

LESSON DESCRIPTION

In this lesson, students learn to figure out their desired financial objectives by planning smart and effective financial goals that will help them achieve their goals. They will set financial goals that are specific, measurable, attainable, relevant, and time-bound.

Many men and women invest, spend, invest, then wonder why they’re short of funds when it’s time to cover the invoices or the reason they never have the money for those things they actually want. If they’d set clear objectives, created plans to achieve them and worked the plans as faithfully as they watch their favorite YouTube channels, they’d be not as stressed and a great deal happier.

If you’re planning an event for your friend, would you just throw it all together at the last moment? No. You would choose the goal (a great event) and work backward to determine everything you’d need to do to make it happen.

Setting goals that are SMART means that you may describe your thoughts, concentrate your efforts, make use of your own time and resources and raise your odds of attaining what you need in life. In this lesson, we will research what SMART goals are, and we are going to have a look at ways to utilize them to attain your objectives.

What Exactly Does SMART goals Mean?
SMART is an acronym which you may use to direct your target setting.
Its standards are generally credited to Peter Drucker’s Management by Objectives. The earliest known use of this term happens in the November 1981 issue of Management Review from George T. Doran. He said that SMART has come to mean unique things to different individuals.

To Make Sure That Your Objectives are clear and accessible, it needs to be:

  • Specific
  • Measurable
  • Achievable
  • Relevant
  • Time Bound


The Way to Use SMART

Specific
Your target ought to be clear and unique, otherwise you will not have the ability to concentrate your efforts to feel genuinely motivated to attain it.
What do I wish to achieve? Who’s involved? Where’s it situated? Which tools or limitations are involved?


Measurable
It is important to have quantifiable objectives, so which you may monitor your progress and stay motivated. Assessing progress enables you to stay focused, meet your deadlines, and sense the delight of becoming closer to attaining your objective. A quantifiable goal should address concerns such as: How much? How many? How can I know when it’s accomplished?

Achievable
Your target also should be realistic and achievable to become prosperous. To put it differently, it ought to stretch your skills but still stay possible. When you establish an achievable goal, you might have the ability to identify previously overlooked opportunities or resources which may bring you nearer to it. How do I accomplish this objective? How realistic is your goal, according to additional limitations, such as monetary things?

Relevant
This measure is all about ensuring that your target matters for you personally, and additionally, it contrasts with other pertinent objectives. Most of us need support and help in attaining our objectives, but it is important to keep control over them. Thus, ensure your plans drive everybody ahead, but you’re still accountable for achieving your goal. A relevant aim can answer “yes” to those questions: Is this the ideal moment? Does this fit our additional efforts/needs? Am I the ideal person to accomplish this objective? Is it important in the present socioeconomic atmosphere?

Time-bound
This portion of the smart goal standards helps to stop regular activities from taking priority on your longer-term targets. When? What could I do three months from today? What could I do three weeks from today? What can I do now?

PROCEDURE

Students can do this on their own or in groups. Give each student or group a goal statement or statements (or even make your own statements that may be more relevant to your students). Guide students to use the worksheet to add details to the goal statements.

Guide students to analyze the different elements of this goal and include what is needed for every elements of the “SMART” acronym. Model one rewrite if it is beneficial to get the students started.

Arrange for students or groups to exchange aims to peer review the revised goals for completeness or missing components.

  • Save money to buy a bicycle.
  • Go on a backpacking trip with friends.
  • Visit the local tourist area.
  • Buy a new monitor for my computer.
  • Buy a birthday gift for my mother.
  • etc.

Example to model for the goal-writing process:

Original Goal: To find a pair of jeans.

S= what type of jeans? Possible answer: new pair of jeans

M= Just how much would be the jeans? How long do I have to save? Possible response: The jeans are $60 but the sales person told me they’d go on sale a month at 10 percent off. So, I have one month to spare if I need a cheaper price.

A= What resources do I have available to attain the goal? I know I will earn at least $30 a week doing yard work in the neighborhood.

R= Do I really require a new set of jeans right now? Possible response: my current jeans are worn.

T= When do I need to find these jeans? Possible response: I wish to receive them today, but would rather await the sale price.

New SMART goal: To save $20 a week from my job for the next three weeks to buy a new pair of jeans.

GRADE LEVEL

7-12, Young adults

CONCEPTS

  • Understand spending goals
  • Personal goals and money goals
  • Personal finance

OBJECTIVES

Students will:

  • Write personal financial goals.
  • Learn to understand SMART goals.
  • Identify ways to improve their spending decisions and behavior.
  • Identify sensible vs. unwise spending
  • Prioritize spending decisions

TIME REQUIRED

20-30 minutes.

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Spending Log

LESSON DESCRIPTION

In this lesson, students keep a log of all their spending for a period of time (day/week/month) to help identify their spending habits and patterns.

How do you spend your money? Understanding your current spending patterns and habits will help you understand how to budget and better manage your money.

Distribute the attached worksheet to students.  Students should be instructed to keep track of their spending for one week. For each item or service they spend money on, they should write the day, time, description of the item or service purchased, dollar amount spent, and the reason they made the purchase. If privacy is a concern, then the item description may be changed to a category rather than a specific item or service.

After the week is over and students have completed the worksheet, have them analyze their spending log to identify trends and habits.

Need or Wants

For each item on the spending log, have the students decide if it is a need or a want. They may write “Need” or “Want” next to each line. Ask the question if each need is a true need or really a want? Can a want become a need?

Monthly activity

Alternately, do this activity for a month, rather than a week. Use separate log pages for each week. Students will have a better idea of their spending patterns if they use a month rather than a week.

Lesson extension

Have students ask a family member to also keep track of their spending using the spending log. Then have them compare their spending to their family member.

GRADE LEVEL

9-12, Young adults

CONCEPTS

  • Understand spending habits
  • Money values and attitudes
  • Personal finance

OBJECTIVES

Students will:

  • Track their weekly spending.
  • Learn to understand their spending habits.
  • Identify ways to improve their spending decisions and behavior.
  • Identify sensible vs unwise spending

TIME REQUIRED

Varies. Out of class assignment. 1 week normal time required. 1 month optional. Longer time periods also possible.

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Understanding your Money Habits

LESSON DESCRIPTION

In this lesson, students learn to understand and identify what are their money habits.

Every money decision you make either reinforces good or bad money habits.  The first step toward creating good money habits is to first identify the money habits you currently have.

Distribute the attached worksheet to students.  They should first list the money habits they have, related to spending, saving, and sharing.  Then, they should identify each habit as either good or bad and state the reason why.

Give the students some examples of money habits to help them get started.  For example, seeing an item on sale at the store and buying it even though they did not go to the store for that item.  Or, saving $1 for each $10 they earn in a box they keep at home, etc.

After the students complete the worksheet, have a discussion about the positive and negative habits. What are the positive consequences of the positive habits they identified? What are the negative consequences of the negative habits?

Additional task: For each bad money habit, ask students to identify what they could do to improve that habit? Is there something they could do to replace the habit with another more positive habit?

GRADE LEVEL

9-12, Young adults

CONCEPTS

  • Understand money habits
  • Spending
  • Saving
  • Sharing
  • Money values and attitudes
  • Personal finance

OBJECTIVES

Students will:

  • Describe their positive and negative money habits.
  • Learn to understand the difference between wise and unwise habits.
  • Identify ways to improve their spending decisions and behavior.

TIME REQUIRED

20 minutes

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Abraham Lincoln and the Five Dollar Note

LESSON DESCRIPTION

In this lesson, students participate in a puzzle activity to identify leadership characteristics that Abraham Lincoln possessed. They review the changes in the redesigned $5 note and consider how Lincoln’s leadership characteristics contribute to the fact that he is pictured on the $5 note. Students look at a timeline of Lincoln’s life and identify significant events in his road to the White House. They play a game to review content learned in the lesson.

GRADE LEVEL

5-8

CONCEPTS

  • Characteristics of money
  • Coins
  • Counterfeit
  • Currency
  • Money
  • Timeline

 

OBJECTIVES

Students will:

  • Describe leadership characteristics possessed by Abraham Lincoln.
  • Describe the characteristics of money.
  • Explain why Lincoln is featured on the $5 note.
  • Identify important events in Lincoln’s road to the White House.
  • Identify features of the redesigned $5 note.

 

TIME REQUIRED

75-105 minutes

 

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Starting a Budget Introduction

Below are some budget lesson starters — printable worksheets to use with a teaching lesson introducing budgeting. Print both of the lessons below.

 

Suggested Grade Level

4th – 6th Grade.

Fourth Grade.  Fifth Grade.  Sixth Grade. Special education. Teens Teenagers Kids.

 

Worksheet #1:

PERSONAL BUDGETS – NEEDS WANTS

Excerpt – Have you ever thought about what you would most like to buy when you begin to earn money? At some stage in your life you will have to make decisions on how to manage your hard-earned income. You will have to balance your spending and income. This is called “budgeting” …

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Worksheet #2:

PERSONAL BUDGETS – YOUR BUDGET

Excerpt – Create a budget for yourself for the next week. Remember to record all the income you will be receiving. Make a list of your expenditures, prioritizing your needs and wants…

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Introduction to Earning Money

An introduction to earning money.

Teaching Objectives:

  • Students will learn why they should earn money.
  • Students will learn how to earn money.
  • Students will understand what they can do with the money they earn.

 

Suggested Grade Level

4th – 6th Grade.

Fourth Grade.  Fifth Grade.  Sixth Grade. Special education. Teens Teenagers Kids.

 

Earning Money Lesson Plan

Teaching Materials:

  • Earning Money Lesson – (see below for printable lesson)

 

Procedure:

Teachers may either print out the lesson activity and have students read it themselves, or use it for your own lesson.

Students should complete the exercise at the end of the lesson.

Additional classroom ideas:

  • Have the students create brochures, business cards, and business plans for their business.  Have a job fair and invite parents, teachers and community members to come and see what your students have to offer.
  • Talk about competition and what they need to do to set themselves above the others that offer the same service – customer service, promptness, politeness, etc.
  • Follow up this lesson with lessons on budgeting and saving.

 

Lesson Excerpt:

Why Should I Earn Money?

As you get older, you’ll have more freedom to spend more money on your own.  The problem is you might not have that money to spend.  Your parents might give you an allowance, but you might want to have more spending money.  You might also want to save to buy a more expensive item, so earning some extra money can help jump start your savings.

How Can I Earn Money?

There are many things you can do to earn money.  The key, however, is finding the things that appeal to your likes and interests.  If you don’t really like dogs, you probably should not start a dog walking business even if your best friend makes a lot of money doing it in her neighborhood.

Continued…
 

View Full Lesson:

Print out the teaching lesson pages and exercise worksheets for use with this lesson:

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Word Problems with Down Payments

Students will begin to understand the topic of down payments.

Teaching Objectives:

  • Students will learn to define a down payment.
  • Students will learn to calculate new price following a down payment.
  • Students will learn to calculate payment plans based on new prices and down payments.

Suggested Grade Level

6th – 8th Grade

Lesson Excerpt:

Many times, we will see word problems that use terms that we see in real life problems.  These are terms related to money or to business and they are terms that we should know or will need to know to be able to figure out purchases.

One of these terms is the term down payment.

What is a down payment?

A down payment is an amount of money that is paid towards a total purchase.

This happens whenever people want to purchase something and they can’t afford the whole price at once. Often we see this with large items like appliances, houses or cars.  We aren’t going to get into buying a car or a house in this lesson, but we will work with the idea of a down payment.

When someone makes a down payment, they pay a partial amount of the whole. Then that amount is subtracted from the total and what is left is the new amount that they need to pay.

 

 

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Calculating Down Payments as a Percentage

Students will learn to calculate down payments using a percentage.

Teaching Objectives:

  • Students will define down payment.
  • Students will review percentages.
  • Students will review convert percentages to decimals.
  • Students will review calculating percentages.
  • Students will use these skills to figure out down payments.

Suggested Grade Level

6th – 8th Grade

Lesson Excerpt:

Sometimes, a down payment is simply a dollar amount of money, but sometimes it is a percentage.

Before we begin calculating down payments as a percentage, let’s review what a percent is.

What is a percent?

A percent is a part of a whole out of 100. If we say that we have 10% of a something, we have 10 out of 100.  When we calculate a percent, we figure out what part of the whole that we have.

Calculating percents can help us figure out down payments.

If we calculate the percent of a down payment, then we know how much the person needs to pay for the down payment.

 

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To Rent-to-Own or Not to Rent-to-Own?

Students review the elements of a contract. They discuss the characteristics of rent-to-own contracts and compare the cost of those contracts with the outright purchase of goods.

Objectives

Students will

  • define contract and annual percentage rate (APR),
  • explain the elements of a contract,
  • evaluate the terms and costs of a rent-to-own contract, and
  • compare rent-to-own costs with outright purchases.

Time Required

60 minutes

Concepts

  • Annual percentage rate (APR)
  • Contract
  • Elements of a contract
  • Rent-to-own contract

Whiteboard (ActivInspire/flipchart)
PowerPoint (pptx)

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