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Online Lesson
About this lesson
grade level:
6-8
curriculum standards:
10
12
19
author:
Mickey Ebert
More lessons from this author
posted on:
December 17, 2003
State Standards
Teacher's Version
This lesson provides you with the resources that you will need to teach this lesson. We have also provided a link for your students to follow this lesson online. The link below contains only the information your students need:
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EconomicsMinute
Climbing the Savings Mountain
Key Economic Concepts:
- Banking
- Borrower
- Deflation
- Inflation
- Interest
- Interest Rate
- Savers
- Savings
Description:
Students discover how saving money can be compared to a mountain climb. The climb can be fast or slow, safe or hazardous, scenic or thrilling. You will find out that there is more than one way to get to the top!
Lesson Objectives:
Students will:
- Analyze ways to save money.
- Create financial goals.
- Define the differences between earning no interest, simple interest, and compound interest.
- Predict the effect of inflation on money that has been saved.
Introduction:
Students are sometimes clueless when it comes to saving money. Society sure has shown them how to spend! It is
important that our students learn that saving their money not only helps them achieve financial goals, but actually earns them extra money. In this lesson they will learn that there are a variety of ways in which to save, depending on whether they have short-term or long-term goals.
Resources:
- Republic of Saving
www.orangekids.com/amy/save_intro.htm
A web site that takes the students through different ways to save and different reasons for saving. - Buy a Bond, James! A Lesson on U.S. Savings Bonds
www.econedlink.org/lessons/index.php?lesson=EM385
Buying a United States Savings Bond is yet another way to save. - When Gas was a Quarter
www.econedlink.org/lessons/index.php?lesson=EM373
Inflation and Deflation are the topics of this lesson.
- A Penny Saved is a Penny at 4.7% Earned
www.econedlink.org/lessons/index.php?lesson=EM157
Interest is the main idea of this lesson.
- Banking is INTERESTing
www.econedlink.org/lessons/index.php?lesson=EM381
Banking is INTERESTing is another lesson explaining savings.
Process:
A good way to start this lesson is to review the importance of goals. Whether it is goals for academic, personal, or financial achievement, goals provide an end point. It's how to get to the end that confuses the students.
Ask students to name two items that they would like to buy. Tell them to pick one item they would like to have soon--within three months--and another item they would like to buy in five years. Ask them how much each item costs. Tell them the amount of money they will need to buy these items is part of their financial goals. Tell them that there are steps they can take to reach their financial goals. One of the most important ways to meet a financial goal is to figure out how to save money. Let them go through the lesson to find out the different ways to save money.
Urge students to use the online dictionary provided to find out what each highlighted word means.
NOTE: It is important that the students click on the strategies on each page that explain more about the subject. The information pop-up pauses a long time before giving more information. Make sure the students come back to the lesson before going to the next page.The embedded pop-ups that the students will explore cover the following issues.
- Link 1- saving choices
www.orangekids.com/amy/save_st_001.htm - Link 2- effects of inflation
www.orangekids.com/amy/save_bm_001.htm - Link 3- earning interest
www.orangekids.com/amy/save_bm_003.htm# - Link 4- CDs and other banking options
www.orangekids.com/amy/save_bb_001.htm#
Conclusion:
Using a savings account or buying a CD is a wise way of saving your money. Simple interest is interest paid on the money that the saver deposits. Compound interest is interest on the money the saver deposits and on the interest that the money has earned. Inflation makes saving money at home for a long-term goal a risky choice.
Assessment Activity:
The online quiz about savings is a pretty good quiz. It deals with the definitions of interest and inflation, as well as CDs, savings accounts, and checking accounts.
Note: The online quiz is based on material found on the Planet Orange website. Prior to students taking the quiz additional instruction could be provided on how daily compounding yields a higher return than annual compounding.
Do a quick check on the student's financial goals. Did the students remember to outline ways to get to their goals? Are their figures accurate?
Note: Some actual or estimated interest rates could be made available to students who may want to do some projections using their knowledge of simple interest.
Extension Activity:
- Buy a Bond, James! A Lesson on U.S. Savings Bonds
www.econedlink.org/lessons/index.php?lesson=EM385
Buying a United States Savings Bond is yet another way to save. - When Gas was a Quarter
www.econedlink.org/lessons/index.php?lesson=EM373
Inflation and Deflation are the topics of this lesson.
- A Penny Saved is a Penny at 4.7% Earned
www.econedlink.org/lessons/index.php?lesson=EM157
Interest is the main idea of this lesson.
- Banking is INTERESTing
www.econedlink.org/lessons/index.php?lesson=EM381
Banking is INTERESTing is another lesson explaining savings.
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