Fidelity Learning Lab®
Grades 3-5
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Lesson plans
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In reading and discussing an adaptation of Aesop’s fable “The Grasshopper and the Ant,” the students learn about the trade-off between satisfying wants today and planning for the future. They use the fable to examine their own behavior and decisions about saving. They learn that interest payments provide an incentive to save. The students compose fables of their own, expressing their ideas about the importance of decisions about consuming and saving.
“You can’t have your cake and eat it, too” is an old and familiar saying. If people could have everything they want, whenever they want it, life would be very different. People wouldn’t worry about choices, and they certainly wouldn’t worry about things they might want in the future. However, resources and incomes are limited, so people must make choices.
Understanding the concept of opportunity cost is critical for good decision-making. The ability to identify the opportunity cost—the highest-valued alternative that must be given up when another option is chosen—helps people to assess their alternatives.
Understanding opportunity cost is especially helpful in making decisions about saving money. Saving money enables people to extend their uses of today’s income over a longer period of time. For most children, the future is very abstract. They tend to think only about things they want right now. Saving for the future may be far from their mind or utterly foreign.
This lesson correlates with national standards for English language arts, mathematics, and economics, and with personal finance guidelines.
Objectives
At the end of this lesson, the student will be able to:
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Define opportunity cost and interest.
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Analyze the trade-offs and opportunity cost in a decision about saving.
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Identify reasons to save.
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Explain how savings can be used to satisfy future wants.
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Use the concept of opportunity cost to compare the advantages and disadvantages of saving and to make informed decisions about saving.
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Explain how interest serves as an incentive to save.
Materials
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A transparency of Visual 4.1 (to display with answers) or a transparency of Exercise 4.2 (to display without answers)
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A copy of Exercises 4.1, 4.2, and 4.3 from the Student Workbook for each student
Economic and personal finance concepts
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Economic want
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Interest
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Opportunity cost
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Savings
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Spending
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Trade-off
To download visuals, correlations to state standards, interactives, and more, visit the Council for Economic Education website.*
© Council for Economic Education
This lesson provides activities designed to help students think clearly about decisions related to saving money. The students set a goal, determine a strategy for saving, and decide how they will save to achieve their goals. They also learn the basics of using savings accounts.
Saving involves trade-offs. When we save, we give up some present consumption in order to provide for future consumption. Doing so is often difficult for adults, and it is certainly difficult for children. But knowing about savings plans, savings goals, and interest-bearing savings accounts can help children to develop a savings routine. They can be encouraged to put away pennies, nickels, dimes, or more—for a vacation, a big purchase, or a college education.
When adults require children to save, children may perceive saving as a negative experience, focusing on what they forgo today instead of what they gain in the future. However, when children make the decision to save for reasons they choose and in a manner that they choose, they position themselves to experience a key benefit of saving. They may attain a goal they could not have achieved without saving.
This lesson correlates with national standards for English language arts, mathematics, and economics, and with personal finance guidelines.
Objectives
At the end of this lesson, the student will be able to:
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Define savings, economic want, incentive, short-term goals, long-term goals, and interest.
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Explain the elements of a savings plan.
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Give examples of short-term and long-term goals.
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Give examples of incentives.
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Compare the advantages and disadvantages of various savings options.
Materials
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A transparency of Visuals 5.1, 5.2, and 5.3
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A copy of Exercises 5.1, 5.2, 5.3, 5.4, and 5.5 from the Student Workbook for each student
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A copy of an actual bank statement
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A piggy bank
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A coffee can or coin purse with coins in it
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A photograph of a local bank
Economic and personal finance concepts
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Economic want
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Incentive
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Interest
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Long-term goals
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Savings
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Short-term goals
To download visuals, correlations to state standards, interactives, and more, visit the Council for Economic Education website.*
© Council for Economic Education
This lesson focuses on spending decisions, particularly the decisions that students make as consumers. The activities establish a rationale for the study of financial decision-making. The lesson is introduced on one day and completed after the students have collected information over a week-long period.
Children make many decisions about consumer spending. They make decisions about spending their own money, and sometimes they assist in making decisions when others pay. They may decide what to have for lunch or which candy bar to buy. They may take part in family decisions about spending—which breakfast cereals to buy, what to do during summer vacation, or whether to adopt a pet.
Children can learn to make decisions carefully. Because they cannot have everything they want, they face scarcity. Scarcity means that there are not enough resources and, therefore, not enough goods and services, to satisfy all wants. Because of scarcity, students must make choices. Classroom activities that involve having the students choose among alternatives can improve their understanding of the choices they must make.
This lesson correlates with national standards for English language arts, mathematics, and economics, and with personal finance guidelines.
Objectives
At the end of this lesson, the student will be able to:
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Explain how spending on goods and services satisfies economic wants.
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Identify consumer spending decisions.
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Compare and contrast individual spending with group or family spending.
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Compare various spending decisions, noting similarities and differences.
Materials
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A transparency of Exercises 6.2, 6.3, and 6.4 from the Student Workbook
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At least two copies of Exercise 6.1 from the Student Workbook for each student
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A copy of Exercises 6.2, 6.3, and 6.4 from the Student Workbook for each student
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A can of soup, candy bar, newspaper, small toy, book, and other small goods
Economic and personal finance concepts
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Consumers
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Consumer spending decisions
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Economic wants
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Goods
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Scarcity
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Services
To download visuals, correlations to state standards, interactives, and more, visit the Council for Economic Education website.*
© Council for Economic Education
By participating in a readers’ theater activity, the students learn about opportunity cost as a key factor in decision-making. They use the concept of opportunity cost in a related simulation activity, deciding which wants to satisfy with limited income.
Making informed decisions about spending requires a clear understanding of alternatives. To learn how to use resources wisely, children must learn to make choices among alternatives. People always face the condition of scarcity; they must, therefore, make choices and use income carefully to obtain the goods and services that they value most highly.
It is important for students to learn that when people choose, they also refuse. In any choice, the opportunity cost is the highest-valued alternative that is not chosen. Prioritizing wants, a critical consumer skill, is made meaningful by an understanding of opportunity cost.
This lesson correlates with national standards for English language arts, mathematics, and economics, and with personal finance guidelines.
Objectives
At the end of this lesson, the student will be able to:
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Define economic wants, opportunity cost, income, scarcity, and wages.
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Use the concept of scarcity to explain the need to make choices.
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Identify the opportunity cost of a decision.
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Use the concept of opportunity cost in making thoughtful choices among alternatives.
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Economic and Personal Finance Concepts
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Economic wants
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Income
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Opportunity cost
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Scarcity
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Wages
Materials
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A transparency of Visuals 7.1 and 7.2
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Copies of Visual 7.1 for the students who are playing parts in the readers’ theater
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A copy of Exercise 7.1 from the Student Workbook for each student
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Drawing materials, catalogs, and newspapers
Economic and personal finance concepts
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Economic want
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Interest
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Opportunity cost
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Savings
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Spending
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Trade-off
To download visuals, correlations to state standards, interactives, and more, visit the Council for Economic Education website.*
© Council for Economic Education
The students are introduced to various methods of payment, such as cash, check, debit and credit cards, and electronic or online payments. They learn about the advantages and disadvantages of each method of payment. They also practice writing a check and recording information on a check register.
Children have many misconceptions about how adults pay for things. Perhaps you’ve heard a parent say, “We can’t afford that,” only to hear a child respond, “Write a check for it” or “Get some money out of the machine.“ Such examples show that children don’t understand the connection between having cash in a transactions account and being able to write checks or “get money.” Children may view the mere use of a credit card as payment, thinking, “Gee, Mom bought those groceries, and she didn’t even have to use any of her money.“ In such a case, the child doesn’t realize that, at a later date, Mom will have to pay her credit card bill with money. Correcting children’s misconceptions about payment mechanisms improves their financial literacy.
This lesson correlates with national standards for English language arts, mathematics, and economics, and with personal finance guidelines.
Objectives
At the end of this lesson, the student will be able to:
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Identify methods of paying for goods and services.
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Define money, check, electronic or online payments, debit card, and credit card.
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Explain the relationship between checks and money held in a checking account.
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Identify advantages and disadvantages of different methods of payment.
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Explain why credit cards are not considered money.
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Explain how a payment is made when a consumer uses a credit card.
Materials
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A transparency of Visuals 8.1 and 8.2
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A copy of Exercises 8.1 and 8.2 from the Student Workbook for each student
Economic and personal finance concepts
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Check
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Consumers
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Credit card
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Debit card
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Electronic or online payment
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Finance charge
To download visuals, correlations to state standards, interactives, and more, visit the Council for Economic Education website.*
© Council for Economic Education
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