Grade: 6 Lesson # 13

Why Do People Save Money?

SS.8.FL.3.7 Discuss the different reasons that people save money, including large purchases (such as higher education, autos, and homes), retirement, and unexpected events. Discuss how people’s tastes and preferences influence their choice of how much to save and for what to save.

SS.8.FL.3.7 Discuss the different reasons that people save money, including large purchases (such as higher education, autos, and homes), retirement, and unexpected events. Discuss how people’s tastes and preferences influence their choice of how much to save and for what to save.

Why People Save Money

Lesson Number: 13

Correlated Florida Standards (See Full Text on Cover Page)

LAFS.6.L.3.6; LAFS.6.RI.3.7

Essential Questions

What reasons do people have for saving money?

Why is it important to set savings goals?

What is a saving plan and why is it important?

Learning Goals/Objectives

  • Identify reasons that people save money
  • Recognize the importance of savings goals
  • Develop a saving plan.

Overview

In this lesson, students will explore the concept of savings. They will be able to identify reasons that people save money. Through video, discussion and activities, students will recognize the importance of savings goals and be able to develop a savings plan.

Materials

  • Computer with internet access
  • Promethean or Smart Board
  • Video: Lesson 1: Saving Money
  • Post it notes
  • Visuals:
  • Handout #1 Develop a Saving Plan (included)

Time

  • 50 minutes

Activity Sequence

INTRODUCTION/HOOK( 7minutes)

Ask students if anyone knows the definition of saving(s)? Discuss answers. (Putting money aside from current income so that it will be available for some use in the future—e.g., buying a car, paying college tuition, etc.)

Show the video: Lesson 1: Saving Money

After viewing video explain to students that in today’s lesson, the class will be exploring some of the main points presented in the video: Importance of Saving; Short Term and Long Term savings goals; and Saving Plan.

ACTIVITY (40 minutes)

  1. Brainstorm with students about what reasons people might have for saving. List their ideas on the board (possible answers: car; home; children; college; new… ; item they want to purchase; vacation, etc) (2 minutes)
  2. Next, have students brainstorm as to reasons they might want to save. List ideas on the board. (2 minutes)
  3. Explain to students that part of today’s lesson will focus on saving and goal setting. Explain that the act of setting a goal helps you get organized and think clearly about the steps that might be needed to reach your goal. When we state clearly what we want to do, ideas about how to do it often come into focus. ( 1 minute)
  4. Next choose a hypothetical situation, such as planning a class trip to Disney World (or choose one of the savings items from the student list from step 3). Ask students: “What steps would you take to plan a class trip to Disney World? (or other topic you have selected).”
  • Divide the class into small groups. Give each group sticky notes (or index cards). Allow about 10 minutes for each group to brainstorm ideas about “Things to do to prepare for a class trip to Disney World,” recording each idea on a sticky note or index card (one idea per note).
  • On the board, draw five large circles, labeling them, from left to right, “Three months before the trip,” “One month before the trip,” “Two weeks before the trip,” “One week before the trip.””Day Before the trip.”
  • Have students post their notes on the board in the appropriate circles.
  • Discuss the students’ responses. Focus the discussion on the reasoning behind the proposed steps.

Explain to your students that just like planning a trip, saving money to reach a goal takes planning. (Adapted from FINANCIAL FITNESS FOR LIFE: Teacher Guide Grades 6-8 – Council for Economic Education) . (15 minutes)

  1. Explain to students that the first step to saving is to set a goal. Decide upon your reason for saving (buy something…iPad; car; tickets to a Heat game. Save for college; Save to help your family, etc). Then decide how much you need to save. Ask students: “Are you saving money for a goal of your own right now? .Discuss their responses. (2 minutes)
  2. Display Visual 10. 1. On your Promethean or Smart Board:
  • Introduce the concepts of “short-term,” “medium-term,” and “long-term goals.” a. Go over the definitions. Note that the time spans used in the definitions are somewhat arbitrary, but they represent common-sense boundaries for these saving terms.
  • Ask students to suggest goals (buying certain goods or services, for example) that might require short-, medium-, or long-term savings plans. (Answers might include saving money to attend a sporting event or to go to the movies [short-term goals]; saving money for an upcoming vacation [a mediumterm goal]; saving money to buy a car or pay for a college education [long-term goals].) (3 minutes)
  1. Distribute Handout #1. _____Term Savings Plan. Have students choose one of the goals they have listed above. They will then decide if they will need a sort-term, medium-term, or long term goal. They should fill in the appropriate goal length at the top of Handout #1. Discuss Handout and answer questions regarding the assignment. Have students complete handout #1. (10 minutes)
  2. Review and discuss Handout # 1 (2 minutes)
  3. Explain to students that once their financial goals are determined, they will need to decide where to save their money. You could save it in a can, under the mattress, in a drawer, but most people would prefer to deposit their savings in an account at a bank or another financial institution. Why might people prefer to deposit their savings in an account? (When people deposit savings in a bank account, their money earns interest. The money they save becomes a financial investment; it will grow; and the depositors will eventually have more dollars and cents than they originally deposited.) If time permits, display and discuss the page: About Savings Accounts (3 minutes)

CLOSURE (3 minutes)

Review concepts from today’s lesson. Revisit and discuss the lesson’s essential questions.

OPTIONAL EXTENSION SUGGESTION/HOME LEARNING

  • Have students use computers or tablets to visit The Mint.org and read “The 5 Step Save-Spend/Plan.” Students should then click the link to create a Money Diary
  • Have students complete the activity on Visual 10.2 (from visual displayed earlier in step 6 of the lesson plan) Answers are included in the visual packet.
  • Have students participate in the interactivities at The Mint.org:
  • The Truth About Millionaires Quiz:
  • Interactive Saving Calculator:
  • When Will You Be a Millionaire Calculator:
  • The Compounding Calculator:

Sources/Bibliographic Information that contributed to this lesson:

Lesson Adapted from: Why Save: Financial Fitness for Life grades 6-8 Council for Economic Education

The Mint.org

Teen Savings Account video:

What’s Up In Finance:

Practical Money Skills- Saving and Investing

Name ______Date ______

Handout # 1 ______Term Savings Plan

Directions: Think of something you would like to save money to acquire. Consider any sources of income you may have when answering the questions below.

  1. What would you like to have and how much does it cost?

  1. How long must you save to reach your goal?

  1. Chart your sources of income in a table. Consider the frequency of each source of income and any recurring expenses you may have.

  1. Calculate the amount you plan to save and how long it will take you to reach your savings goal.

  1. Explain why developing a savings plan is necessary. What trade-offs will you need to make in order to be able to be able to save for this item?

  1. Is there anything you can do to pay less for the item you want to purchase? Explain what and how this impacts your savings plan.

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