Spending and Saving Strategies

Procedures

 1.         Begin by explaining that “saving” has two difference meanings.

             •  Finding ways to pay less for goods and services or not purchasing to reduce spending.  When you use a coupon to “save” 25 cents on a can of corn, you are saving.  The result: more money to spend on other things.

             •  Accumulating funds for future spending.  When you put $10 a week in a savings account at a bank, you are saving.  The result: accumulation of wealth  for the future – usually to achieve a goal.

             What is the difference?  Elicit ideas from the class.  Saving money on purchases  usually achieves short-term goals.  Saving for the future is a long-term goal.  It usually takes the first one (short-term) to achieve the second (long-term).

             The difficult part of saving for the future is that there are so many short-term goals that you face, and that “get in the way” of achieving ling-term goals.

 2.         Explain that in this exercise, the class will look at several situations involving   people making spending choices.  The class will be asked to suggest what the     people in the scenarios should do.  The activity can be done individually or in  small groups. 

 3.         Ask: What advice about spending and saving would you give to these people.  The class should discuss their ideas about each scenario and suggest answers to the questions.

             •  What is the decision the person must make? 

            •  What are their alternatives in each situation?

            •  What are the costs - whatever is given up - for each of the alternatives?

            •  What are the benefits - what is gained - of each of the alternatives?

             Focus the conclusions of the discussions on identifying the alternatives, costs  and benefits.  You can have small groups talk about one scenario and share their ideas with the rest of the class.

 5,         Observe the group work to monitor individual participation.

             Students should be able to indentify two or more alternatives for each situation.  This can be done orally or in writing.

             Students should be able to identify the type of savings account appropriate for  each scenario.