Spending and Saving

Spending and Saving

After this lesson you will be able to

Identify the different ways people pay for goods and services and how they save money

Vocabulary

• Credit

• Credit card

• Savings

• Bank

• Interest

• Deposit

• Loan and budget

Paying for Goods and Services

• The most common way to pay for things is by using money

• There are different ways we can pay for things using our money

• The first way is by using US dollars

• The second way is by bartering or exchanging (exchanging your granola bar for your cousin's apple)

• The third way is by credit

Open Ended

What is one of the ways you can use to pay for things?

Credit

• Credit is the promise to pay for something

• A credit card lets the cardholder buy things and pay for them later

• The cardholder pays the credit card company every month until all of the money is paid back

Multiple Choice

A __________ lets you buy something now and pay for it later.

• US money

• Credit card

• Bartering/exchanging

Savings

• The money a person earns but does not spend is called that person's savings

• For example, suppose you baby sit and earn $10 but you want to buy a pop it for $7. If you subtract the $7 from the $10 you would have $3 left over that you can save to use later

• You can save money over a long or short period of time (days, weeks, months, years)

• You can save for small things like a basketball or bigger things like a car

Multiple Choice

You can save money by...

• Putting it away for later

• Spending it right away

Savings Accounts in Banks

• A bank is a business that keeps exchanges, and lends money to people

• A bank is a good place to save money because banks give you a bonus for saving

• This bonus is called interest

• Interest is the money a bank gives you for letting it hold your money

• The bank gives you money while you save, and interest makes your savings grow

Multiple Choice

The bonus a bank gives you for saving money is called

• Credit

• Interest

Multiple Choice

The money you put into the bank is called a

• transfer

• deposit

Loans

Multiple Choice

When the bank lends you money it is known as a

• credit

• loan

How to get a loan

Budget

• A budget is a plan that shows your income, expenses, donations, and savings

• A budget is a good way to help you save and spend your money

• Income is money your earn

• Expenses are what you spend

• Donations are money or goods you give to charities, or groups that help others

• Savings is the money you saved

Multiple Choice

A plan that shows your income, expenses, donations, and savings is called a

• donation

• budget