Savvy Spending:

Sharpening Money Decisions

LE SSO N 11 : T E ACH ER ’ S G U I DE

Whether it’s longing for a new snowboard or a designer jacket; teens often have a
difficult time distinguishing between their wants and needs. This lesson will help students
differentiate between wants and needs, and understand why separating the two is
important in order to make smart financial decisions. They will also explore the concept of
opportunity cost and deepen their understanding of what it means to spend responsibly.

LEARNING OBJECTIVES:
Topic: Responsible Spending
Students will…
Time Required: 55 minutes
• Assess personal spending behavior
SUPPLIES: • Understand the concept of opportunity cost
• Evaluate spending choices when it comes to personal wants
• Speakers and the song “If I Had a
Million Dollars” by Ed Robertson versus needs
and Steve Page
• Student activity sheet
STANDARDS:
• Notebooks
Jump$tart Standards:
PREPARATIONS:
• Planning Standards 1 and 6
• Copy student activity sheet
National Standards for Economics:
• Load the song at
practicalmoneyskills.com/HS13
• Standard 1: Scarcity
• Standard 2: Decision Making
STUDENT ACTIVITY SHEET:
Common Core ELA Anchor Standards:
Wishful Wants or Necessary Needs?
In this activity, students will evaluate
• Reading: Key Ideas and Details
various spending scenarios and • Speaking and Listening: Comprehension and Collaboration
identify wants versus needs. They will • Speaking and Listening: Presentation of Knowledge and Ideas
then analyze what they would do in
• Language: Vocabulary Acquisition and Use
the same situation and how they could
make a more responsible choice.

TEACHER’S GUIDE: SAVVY SPENDING | 1

 LE SSO N 11 : TE ACH ER ’ S G U I DE INSTRUCTION STEPS

Essential Question “How can I spend my money responsibly?”

Investigate: If I Had a Million Dollars

TEACHER’S TIPS
[Time Required: 20 minutes]
1. Begin by playing the song “If I Had a Million Dollars” as students arrive to What is the Essential Question?
class. Write the figure $1,000,000 on the board, and ask students what The Essential Question is designed
they would do if they had a million dollars—would they buy a new laptop? to “hook” the learner, promote
inquiry and engagement with
Help out a friend?
the lesson, and allow students to
2. Have students write in their notebooks about how they would spend the exercise problem-solving abilities. It
money. Next, invite volunteers to share their answers, recording their ideas addresses a larger concept, does not
on the board. Explain that today’s lesson is all about spending responsibly, have a right or wrong answer, and
whether you have a million bucks or ten. requires higher-order thinking skills.

3. Ask students: What is the difference between a want and a need? Invite
volunteers to share their ideas. Remind students that needs are items we Link to Lesson 2:
must have to survive (food, shelter, clothing), while wants are things that Invite students to think about the
are nice to have, but not really necessary. For example: students need financial goals they created in
clothing, but do they need a Louis Vuitton bag or Diesel jeans? Explain that Lesson 2 and how differentiating
clothes are a need, but designer clothes are a want. wants from needs will help them
reach their short-, medium- and
4. Next, tell students they are going to organize their million-dollar purchases,
long-term goals.
separating the wants from the needs.
5. Read each purchase from the board and ask students to raise their hands if
they believe the purchase is a “want” or a “need.”
6. There will likely be some disagreement among students. Use them as an
opportunity to debate the differences between a want and a need, and how
our values are linked to the purchases we make.

Student Preparation: Opportunity Cost

[Time Required: 10 minutes]
7. Explain to students that distinguishing between wants and needs also
means evaluating all options before making a purchase.
8. Ask small groups to discuss the following scenario over five minutes: You
have $200 and you can either buy a video game console or a digital camera.
Which do you buy and why? Why can’t you buy them both?

TEACHER’S GUIDE: SAVVY SPENDING | 2

 LE SSO N 11 : TE ACH ER ’ S G U I DE INSTRUCTION STEPS

9. Invite groups to share their reasoning. Explain that whenever we make a

TEACHER’S TIP
spending decision, choosing one option affects whether or not we can make
the other choice. Tell students this is called opportunity cost.
What is Reflection?
10. Explain that if students bought the cell phone, the video game console The Reflection part of the class gives
would be the opportunity cost and vice versa. Now ask students to consider students the opportunity to reflect
the choice between spending $200 on a new phone and making a car on the bigger-picture meaning of
payment. If you opt to buy the phone, how will you pay for the car? Help the exercise, and to assimilate and
students to see how opportunity cost can affect choosing between a want personalize some of the concepts
and a need. and ideas learned about in the class.

Challenge: Wants vs. Needs

[Time Required: 20 minutes]
11. Distribute the activity sheet Wishful Wants or Necessary Needs? and
explain that students will now get to evaluate the needs and wants at play in
several different examples.
12. Working in groups of four to five, students should determine the wants and
needs in each scenario and justify their reasoning.
13. Invite groups to present their findings to the class, and then discuss why
certain expenses are wants while others are needs.

Reflection
[Time Required: 5 minutes]
Have students think back to the beginning of class when they determined how
they would spend a million dollars and ask them to reflect in their notebooks
about how their perception has changed. Would they spend the money in the
same way? Why or why not?

TEACHER’S GUIDE: SAVVY SPENDING | 3

 Wishful Wants
or Necessary Needs?
LE SSO N 11 : AN SWER K E Y

1. C
 asey needs a car to move her belongings across the country, but a brand-new car that will put her
$7,000 in debt is a want. The best decision in this case is to select the used model. Even though
it may not have all the bells and whistles of a new car, it is still reliable with low miles and it meets
Casey’s needs.
2. Tom has done a good job of researching all of his options. He needs a new laptop, but the expensive
model is a want. He’s discovered that he can meet both his needs and his wants by purchasing
a refurbished version. Since the refurbished model carries a warranty and Tom has had a good
experience with the company in the past, he should go ahead and buy the refurbished computer.
3. Rent money is the primary need, while the new watch and clothes are wants. While Stephanie may
want to buy a new watch and clothes, she needs to pay rent first before making other purchases.
4. M
 ichelle should take care of her bills first, and then decide if she wants to spend less on her
mother’s gift in order to afford the concert, or skip the concert and put the money into her savings
account. Help students see that our values are closely linked to the decisions we make about
money. If Michelle values giving her mother a gift, she may want to sacrifice the concert to be able
to afford a nice gift.

ANSWER KEY: WISHFUL WANTS OR NECESSARY NEEDS? | 4