## What Is Money?

This lesson focuses on two types of money: paper and coins. The students identify money and its value (its buying power) while participating in a money-matching activity. They estimate the number of coins in a can, then they determine the exact number of coins and their value in terms of dollars and cents.

The forms of money we use today have evolved over many years. Because this lesson is addressed to primary school students, it deals only with two familiar types of money: coins and paper. It shows that the value of money is based on our ability to buy things with it and that different denominations of money have different value in terms of purchasing power. In this lesson, students make decisions about using money, based on combinations of different kinds of money.

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:

• Distinguish between two kinds of money: coins and paper.
• Explain that the value of money is determined by our ability to buy things with it.
• Match the names of coins and paper money with their value.
• Understand that people use money to get the goods and services they want.

### Economic and Personal Finance Concepts

• Choices
• Coins
• Economic wants
• Functions of money
• Human capital (work skills)
• Money
• Paper money
• Value of money

### Materials

• Storybook: Story 3, “What Is Money?”
• Activity Sheet 3.1: Pocket Change
• Activity Sheet 3.2: Paper Money
• A purse or wallet
• Activity Sheet 3.3: Design a Coin
• One envelope for each student
• An assortment of play money
• A coffee can, or can of similar size, with a lid
• An assortment of real coins
• Plain paper and pencils
• Tape

To download visuals, correlations to state standards, interactives, and more, visit the Council for Economic Education site, opens in new window.

© Council for Economic Education

### Special Instructions for Materials

For Activity 1:

• Put an assortment of coins in the can as follows: 1 gold-colored dollar coin, 2 quarters, 2 dimes, 4 nickels, and 10 pennies.
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## Why We Save

The students create a banner depicting the choices they make and the opportunity costs they incur. They learn about saving money in order to satisfy a want. They make and decorate a special vest, which serves as a prop that the students use to consider choices and opportunity costs.

People make decisions about spending and saving. If people save, they incur an opportunity cost—giving up the opportunity to satisfy their most favored want at the present time. If people spend, they give up the opportunity to save—which, in turn, would create an opportunity to buy goods and services in the future. In either case, they incur an opportunity cost. The decision they face is choosing the option with the lower opportunity cost.

This lesson correlates with national standards for English language arts, mathematics, and economics standards, and with personal finance guidelines.

### Objectives

At the end of this lesson, the student will be able to:

• Identify the opportunity cost when a choice is made.
• Calculate how money saved can accumulate into a larger amount over time.
• Explore spending and saving decisions and the opportunity cost associated with each decision.

### Economic and Personal Finance Concepts

• Banks
• Choices
• Deposits
• Economic wants
• Money
• Opportunity cost
• Saving
• Savings accounts
• Spending
• Withdrawals

### Materials

• Storybook: Story 5, “Spend or Save?“
• Drawing paper
• Crayons
• Scissors
• Glue
• A large sheet of bulletin board paper

To download visuals, correlations to state standards, interactives, and more, visit the Council for Economic Education site, opens in new window.

© Council for Economic Education

### Special Instructions for Materials

For Activity:

• Cut a large sheet of bulletin board paper to make a banner.
• Write “Our Hands Make Choices” at the top of the banner.

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## A Good Day for Money

The students listen to a short story introducing them to Penny and Nicholas, the “Money Kids.” They discuss ways in which people receive money—through earning income or receiving gifts. The students are introduced to the concept of human capital (work skills) and the relationship between people’s ability to earn income and the education and training they have. The students also produce a paper chain representing ways in which they have received money.

People receive money in several ways. Typically, they earn money by working. When people work, they use their human capital (work skills), talents, and abilities in a productive way. People also receive money given to them as gifts—birthday presents or graduation presents, for example.

In many instances, money given as a gift had its source as income to the giver of the gift. This lesson focuses on differences between the two sources of money and on human capital as it is related to work.

Note to the teacher: This lesson refers to birthdays as occasions on which some children receive gifts of money. If you cannot use the term “birthday” in your classroom, please make modifications to the lesson and the story before you begin.

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:

• Explain how human capital is related to work.
• Define money earned as income.
• Differentiate between money received as income and money received as gifts.
• Identify ways to earn income.

### Economic and Personal Finance Concepts

• Human capital (work skills)
• Income
• Producers

### Materials

• Storybook: Story 1, “A Very Good Day”
• Activity Sheet 1.1: Pockets
• Activity Sheet 1.2: In My Pockets I Keep…
• Activity Sheet 1.3: Money I Receive
• Several strips of construction paper—each about 1 inch by 8.5 inches. Cut about half of the strips from paper of one color and about half from paper of a different color
• Tape, glue, or staplers
• Crayons or markers
• Scissors
• Six cards, each one labeled with one of the following: 0 pockets, 1 pocket, 2 pockets, 3 pockets, 4 pockets, and 5 or more pockets
• Squares of construction paper in the same colors as used for the strips

To download visuals, correlations to state standards, interactives, and more, visit the Council for Economic Education site, opens in new window.

© Council for Economic Education

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## Saving Makes Us Wait

In a simulation activity, the students set a goal and save money to achieve that goal. They discuss the costs and benefits of saving by completing a decision grid. Using a magic mirror, the students gaze into the future and imagine things they will want to have when they are adults. They learn that people must plan for future wants.

Saving enables people to spend money in the future. Thought of in this way, saving is delayed spending. People decide to save in order to reach economic and financial goals. There are benefits and costs to such a decision: The benefits include accumulating money to achieve future goals; the costs include not being able to satisfy wants in the present. This lesson engages students in thinking about setting goals and achieving those goals through 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:

• Explain that saving is an alternative to spending.
• Identify the benefits, costs, and opportunity costs of a decision to save.
• Show that a plan, such as a plan to save, can transform satisfying a want into an achievable goal.

### Economic and Personal Finance Concepts

• Benefits
• Costs
• Money
• Opportunity cost
• Saving
• Savings goals
• Wants

### Materials

• Storybook: Story 7, “Saving Requires Waiting”
• Activity Sheet 3.1: Pocket Change (from Lesson 3)
• Activity Sheet 4.1: Benefits and Costs (from Lesson 4)
• Brown and green construction paper
• A small hand mirror
• Writing paper, one piece per student
• An overhead projector or document reader
• Glue
• Activity Sheet 7.1: Gazing into the Future

To download visuals, correlations to state standards, interactives, and more, visit the Council for Economic Education site, opens in new window.

© Council for Economic Education

### Special Instructions for Materials

For Activity 1:

• Using the green and brown construction paper, make a large money tree to display on a wall or a bulletin board. Be sure to place it at a height and position so that students can reach its top.
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