Description: In this lesson, students read a story about a young girl named Sara. Sara has always made gifts for her family for special occasions. For Mother's Day, Sara decides she wants to buy a gift for her mother. After reading and discussing the story, students will create a booklet in which they've illustrated Sara's short-term savings goal and their own short-term savings goal.
Personal Finance Concepts: Income, saving, short-term goal
Related Subject Areas: Language arts (reading, comprehension, comparing differences and similarities)
Instructional Objectives: Students will be able to:
- define income, saving, spending, and short-term goals.
- identify examples of short-term goals.
- develop a plan to reach a short-term savings goal.
- copy of A Gift for Mama by Esther Hautzig
- copy of Activity 1, for each student
- scissors and five pieces of tag board for each student
- tape and art supplies
- Read the story with the class or instruct students to read the story prior to using the lesson.
- Discuss the following:
- Why did Sara's parents prefer her homemade gifts? (Those gifts showed that Sara spent time and put a lot of effort into the gift. Her parents thought those gifts showed how much Sara really loved them.)
- Why did Sara want to buy a gift for Mother's Day? (Sara thought the store-bought gifts were nicer. She had found a gift that she was sure her mother would treasure. Grown-ups buy gifts.)
- What did Sara want to buy her mother for Mother's Day? (black satin slippers, trimmed with blue leather)
- Why was Sara certain her mother would want these slippers? (Her mother had a special black robe with blue trim, however, mother didn't wear the robe because she didn't have nice slippers.)
- How much did the slippers cost? (9 zlotys)
- What is a zloty? (a unit of Polish currency)
- Why did Sara's mother seem sad when Sara first gave her the slippers? (The gift wasn't hand made. Mother probably didn't think Sara put much work into buying the gift.)
- What happened that changed mother's mind about the gift? (She learned that Sara worked very hard to earn the zlotys to buy the gift.)
- Explain that when people work they earn income as salary or wages. When people buy goods and services, they are spending part of their income. The income that people don't spend on goods and services is called saving. People save so that they can buy goods and services in the future. Usually people spend some income and save some income.
- Ask the students how Sara thought she could earn income. (She thought that she could repair the clothing for her Aunt's college friends.)
- Point out that when people save they often have a goal in mind. A short-term goal exists if a person must save for less than two years to reach the goal.
- Why was Sara's goal a short-term goal? (Sara must save only a few weeks to reach her goal.)
- Explain that savings are funds that accumulate over time, such as money in a savings account. Have you ever had a savings goal? (parent or sibling birthday, mother or father's day gift, new toy) Record student responses on the board.
- How long did you have to save to reach these goals? (Answers will vary.) Record responses next to the item listed on the board.
- Which of these were short-term goals? (Answers will vary.) Why? (Because we saved less than 2 years to achieve the goal.)
- Ask each student to list some short-term savings goals. Divide the class into pairs. Ask each student to share the goals with his or her partner. Tell them to circle the short-term savings goals that they have in common. Discuss the following:
- Share a short-term savings goal you and your partner had in common. (Answers will vary.)
- Share a short-term savings goal that you did not have in common with your partner. (Answers will vary.)
- Why did many of you have similar short-term savings goals? (Many have similar tastes in toys and games; there is a holiday or event for which many want to save.)
- Why did some of you have different short-term savings goals? (Many have different tastes in toys, games, and other things.)
Note to teacher: Students could create Venn diagrams to demonstrate their similarities and differences.
- Instruct students to select one of the short-term savings goals they listed. Distribute Activity 1 and instruct students to keep their short-term goal in mind as they answer the questions.
- Discuss the following:
- What is income? (wages or salaries earned for work performed)
- What is spending? (using income to purchase goods and services in the present)
- What is saving? (income not spent on goods and services in the present)
- Why do people save? (to buy goods and services in the future)
- What is a short-term savings goal? (an objective the saver will achieve within two years)
- Give an example of a short-term savings goal. (save to buy gifts for Christmas, save to buy a toy or game, save to buy birthday gift)
- Distribute 5 pieces of tag board to each student. Explain that students should cut all five pieces of tag board to the same size and shape. They may choose any size or shape as long as they will be able to write and draw on both sides of each piece
- After the tag board has been cut, instruct students to tape the five pieces together at the edges, both front and back, to create an accordion booklet
- Explain that on one side of the booklet students will illustrate the story of Sara's short-term savings goal. The first panel should include a picture of Sara and the title "Sara's Short-Term Savings Goal." On the remaining four panels, students will illustrate: Sara's short-term goal, the price of the good Sara wishes to purchase, the work she chose in order to earn income, and Sara purchasing the slippers. Beneath each illustration, they should write an explanation of the picture. For example, under the first picture, students might write, "Sara's short-term savings goal was to buy a Mother's Day gift for her mother."
- Explain that on the other side of the booklet students will illustrate their own short-term savings goal. The first panel should include a picture of the student and the title "(Student's name) Short-Term Savings Goal." On the remaining four panels, students should illustrate what their goal is, how they plan to earn income to help them reach the goal, how long they will have to save to reach the goal, and a picture of them with the good or service. They should imagine how they will feel when they have reached the goal. Beneath each illustration, students should write an explanation of the picture. They can use their answers to Activity 2 as a guide.
- Display students' short-term savings goal booklets around the classroom.
Ask students to imagine that Sara continued to sew for her Aunt's friends. As a result, Sara would have more income and should have some saving plans. Write another chapter for the story that includes a description of another short-term savings goal for Sara.
- Teach lesson 5, "The Grasshopper and the Ant," from Personal Finance Economics: $mart $pending and $aving, National Council on Economic Education, 1996.
- Teach lesson 6, "Jeff's Big Decisions," from Personal Finance Economics: $mart $pending and $aving, National Council on Economic Education, 1996.
- Ask students to discuss the following questions with an adult family member.
- Do you set savings goals?
- Do you have some short-term savings goals? If so, name one.
- Why do you think it is important to save and to have savings goals?