Grade: 4 Lesson # 3

What influences our spending choices?

What are the characteristics of a smart consumer?

SS.4.FL.2.5 Explain that costs are things that a decision maker gives up; benefits are things that a decision maker gains. Make an informed decision by comparing the costs and benefits of spending alternatives.

S.S.4.FL.2.6 Predict how people’s spending choices are influenced by prices as well as many other factors, including advertising, the spending choices of others, and peer pressure.

Correlated Literacy Standards:

LAFS.4.L.3.5 Recognize and explain the meaning of common idioms, adages, and proverbs

LAFS.4.RI.3.7 Interpret information presented visually, orally, or quantitatively and explain how the information contributes to an understanding of the text in which it appears.

LAFS.4.RI.3.8 Explain how an author uses reasons and

evidence to support particular points in a text.

Image Source:

SS.4.FL.2.5 Explain that costs are things that a decision maker gives up; benefits are things that a decision maker gains. Make an informed decision by comparing the costs and benefits of spending alternatives.

S.S.4.FL.2.6 Predict how people’s spending choices are influenced by prices as well as many other factors, including advertising, the spending choices of others, and peer pressure.

Being a Smart Consumer

Lesson Number: 3

Correlated Florida Standards (See Full Text on Cover Page)

  • LAFS.4.L.3.5
  • LAFS.4.RI.3.7
  • LAFS.4.RI.3.8

Essential Questions

  • What influences our spending choices?
  • What are the characteristics of smart consumers?

Learning Goals/Objectives

  • Identify factors that influence our spending decisions
  • Identify the characteristics of smart consumers
  • Understand the importance of making wise spending choices
  • Learn how to shop for the most value

Overview

  • Students will explore the factors that influence spending choices and will discover the characteristics of smart consumers. They will explore advertising tactics and practice making smart spending choices by taking part in a “Smart Consumer Challenge”.

Materials

  • PowerPoint Presentation: Being a Smart Consumer (lesson plan embedded into PPT notes) PPT is included in lesson file
  • Handout: Smart Consumer Challenge (Included)

Time

  • 30 minutes

Activity Sequence

INTRODUCTION/HOOK (5 min)

  • Display PowerPoint presentation slides 1-4. Tell students that today’s lesson will explorethe factors that influence our spending choices and will learn how to be a smart consumer. Have students brainstorm what they know about consumer spending and ask them to interpret the quote and image.

ACTIVITY (20 min)

  1. Discuss PowerPoint presentation slide 5. Refer to embedded presenter notes. (4 min)

Say: As adults you will need to know how to spend your hard earned money wisely. You will quickly learn that you can’t have everything you want when you want it. You will need to control your spending and make wise spending decisions so that you can have financial stability for you and your family.

Say: Now we are going to watch a short video segment on what influences our spending decisions and how to control it. As you watch think about the answer to the question above. It is okay to take notes.

Say: According to the video, factors that influence our spending decisions include:

•Peer pressure (“Keeping up with the Joneses”)

•Commercials/Advertisements (falsely convince people that they can’t live without the product)

According to the video, characteristics of smart consumers include:

•Do not spend carelessly (impulse buys of items not really needed)

•Shop for the highest value (coupons, sales, avoid brand name)

  1. Discuss PowerPoint presentation slide 6. Refer to embedded presenter notes. (4 min)

Say: Let’s discuss some of the characteristics of smart consumers. Smart consumers budget themselves. Knowing what you want, and making a plan for exactly what you are going to buy before you go shopping, helps you avoid impulse purchases. It also keeps you from buying something just because a salesperson pressures you to do so.

Say: Smart consumers do their research about the product before buying. Before buying anything, wise consumers go online and check consumer reviews. This helps them determine if the quality and price will get you the most bang for your buck. It also helps you decide which product provides the most value and features for the price. Smart consumers are educated consumers.

Say: Smart consumers seek out sales and promotions – they shop around for the best price. The internet makes this really easy to do nowadays. Sites such as RetailMeNot can help you find a coupon code or a printable coupon for almost any item you want to buy. The Sunday paper has a wealth of coupons that can save you money on groceries, retail purchases and other items. There's no sense paying retail. (Of course, you shouldn't buy an item just because there is a coupon.) Also, ask stores if they have a price-matching policy. Many do.

Say: Smart consumers don’t fall for the gimmicks. Be wary of advertisements and sales aimed at luring consumers to spend more. For example, you might see a sale at a grocery store that lists an item as "five for $10" so you will buy five when you could still get the sale price if you buy one. Every industry has a gimmick designed to get you to spend more.

  1. Discuss PowerPoint presentation slides 7-8. Refer to embedded presenter notes. (4 min)

Say: Let’s practice spotting advertising gimmicks. Remember the purpose of advertising is to get you so spend and spend more.

Do: Select volunteers to share.

Discuss:

•The “Buy one get one 50% off” ad is aimed at getting you to buy more. You may only need one, but can’t resist the half off offer so you leave the store paying for two not one.

•The “Buy 10 Save $5” is doing the same, getting you to buy ten when you probably planned on buying just one. Remember that you could still get the sale price if you buy one. It’s just an industry gimmick designed to get you to spend more. The “5 to 11 am Friday only” ad is creating a sense of urgency to buy. It tells the consumer they only have a few hours on Friday to get that special price and that quantities are limited. That TV will likely be on sale again – for an even better price.

•The “Lowest Prices Ever!” is also creating a sense of urgency to take advantage of the “door buster”.

•The “75% off – everything must go” window ad is trying to lure you into the store.

  1. Discuss PowerPoint presentation slides8-10. Refer to embedded presenter notes. (8 min)

Say: Now we are going to use what we’ve just learned about spending to take part in the smart consumer challenge. Which of the two popular grocery stores do you think provides the best savings – the most value for your money?

Do: Read handout directions. Remind students that they can only shop at one store and that they only need one of each item. Provide students with time to work independently or in small groups – be sure to allow time for students to share at the end.

Do: Solicit a few responses and distribute the accompanying handout “Smart Consumer Challenge”

CLOSURE (5 min)

Do: Have students orally answer lesson review questions on slide 13 and revisit the quote and image on slide 13. Compare how students’ impressions have changed after the lesson.(5 min)

Question 1 Answer: Two factors that influence our spending decisions are peer pressure and commercials and advertisements. The media is extremely powerful in influencing our wants. You see certain clothing and jewelry on celebrities and tv, or your friends have a certain gadget, you rush to get one too because its in style.

Question 2 Answer: Smart consumers avoid impulse spending by having a plan for what they intend to buy and a budget to stick to. They also research the product before going shopping for it to make sure they get the most value for their money. They read reviews online, see product demos, and make sure they are shopping at the store with the best price. Lastly smart consumers seek out sales. They wait for the product to go on sale or find a coupon to get the most savings. Lucy is an example of a smart consumer. She goes online to compare which computer has the best features and quality for the price. She shops at the store with the lowest price and uses a coupon to get an additional discount.

Question 3 Answer: Advertisements persuade us to spend money and buy more. They create a sense of urgency using language as “for a limited time”, “today only”, and “while supplies last”. They claim to offer the best price – “best sale ever” and often try to get you to buy more than you were planning. Examples of this strategy are: “Buy one get one half off” or “3 for $10”Stores place sale signs to try to persuade you to go inside and buy at their store.

Question 4 Answer: Smart consumers can get the most value for their money by planning/budgeting, researching the product, comparing prices, and not falling for advertising gimmicks.

OPTIONAL EXTENSION SUGGESTION/HOME LEARNING

  • BizKid: How to be a Smart Consumer Video:
  • BizKid: Compulsive/Compare Kid Video:
  • Discovery Education Video: Control of Spending (

Sources/Bibliographic Information that contributed to this lesson:

  • Lesson adapted from Geeks on Finance: How to Become a Smart Consumer

Handout: Smart Consumer Challenge