Lesson 1

Understanding My Money


Lesson Overview:

Lesson 1 covers 1) the history of money; 2) the purposes of money; 3) forms of money.


Learning Objectives:

The children will:

  • State how methods of exchange and payment have changed over time.
  • Describe past and present forms of money.
  • Identify coins.


Content Standards Addressed:

Common Core State Standards

National Standards



  • Barter - to trade
  • Edge - the side of a coin
  • Goods - products for sale
  • Money - something used to 1) indicate the value of an item and 2) provide a convenient way to trade and pay for it
  • Rim - the raised edge around a coin design

Part 1: What is Money?

Introductory Activity

Materials Needed:

  • Two different items per child (piece of candy, cookie, extra recess/free time or other pass/certificate, etc.).
  • A sample of each of the items above, with a "1¢" tag on one of them.
  • Copies of the Trading Cards and Let's Go Shopping! reproducibles.
  • One penny per child.
Reproducible: Trading Cards 

1. Make one or more copies of the reproducible (depending on how many children are in your group) and cut apart the cards. Give one to each child. They may color them if desired.

2. Display the untagged item. Tell the group each of them will have an opportunity to trade their card for this item. Warn them that if you don't need or want the item displayed on their trading card, you may not be willing to trade with them.



3. As each pays, he/she should announce to the group what he/she'd like to trade for item. Say aloud your reasons for trading or not trading for the item. (E.g., "I could really use a new pencil. I'll definitely trade with you." Or, "I already have a yo-yo at home, so I don't think I need another. Thank you anyway.")
4. Make note of any comments you overhear during the activity (to discuss later).
After the activity, discuss:
  • Are you happy with the way the activity turned out? Why or why not?
  • Could this exchange have been fairer? How?

The discussion may bring up the following points:

  • The perception of value varies among individuals.
  • Establishing a reasonable price so everyone would pay the same for the item would have been simpler and fairer.

*Be sure to give the remaining items to the children who didn't receive one during the activity.

Review the introductory activity by asking several children to share what they "paid" for the item.​

Display the tagged item and ask:

  • How is this item different from the first item? (It has a price tag. Other answers will vary.)
  • If someone wanted to buy this, what would they do? (Pay a penny.)

Give each child a penny to buy the item.

Afterward, compare the activities:

  • How was the second activity different from the first? (The second item had a price tag, so each child knew how much to pay; they each paid the same, etc.).
  • Did this activity seem to be easier? Why or why not?
  • Do you think paying with money is simpler? Why or why not?

Money provides a way to pay for things. It provides things with a value, so people understand their worth. Money also makes trading with others easier and more convenient. Typically, a seller decides what his goods are worth and displays a price that he considers fair. The buyer weighs the price against how valuable he thinks the item is, makes a buying decision and pays the seller with money.


  • Does everyone need money? Why? (People don't have everything they need to live. They must buy things from individuals and businesses.)
  • Your family buys many of the items you need, like food and clothes. Do you still need money? Why? (Possible answers include: to buy gifts for friends and family members; to buy toys, candy and other items when they're with friends, etc.).


Reproducible: Let's Go Shopping! 

Make copies of the reproducible. Invite the children to draw pictures or cut and paste magazine photos of items they'd like to buy now or in the future. Keep the completed worksheets for use in Lesson 2.


Part 2: Before the Invention of Money

Materials Needed: 

In today's world, most people use money to pay for goods. Goods are products for sale. Long ago, people did not buy their goods with money. The first "money" was actually cattle or other livestock like sheep or camels. (Today, in parts of Africa, people still use cattle as a form of money.) When humans began farming, they could "pay" with produce, such as grain. Precious metals, salt, sword and knife blades, hoes and other tools were also used for money, as were seashells.


  • If a person didn't have salt, cattle or another form of money, how else could he or she buy goods?

Remind them of the introductory activity. They bought the second item for a penny. How did they pay for the first item? (They traded something for it.)

When most individuals lived off what they produced, they might trade something they owned, grew, or made for other goods they needed. Barter is another word for trade. The barter system traces back to 6,000 B.C. Ask the children: 

  • What might a farmer trade?
  • What could an artist trade?
  • What might a fur trapper trade?




Reproducible: Jack and the Beanstalk

The well-known tale of Jack and the Beanstalk mentions the barter (trade) system. Make copies of the reproducible, if desired. Read the story aloud to the group or have them read it aloud. Or invite a volunteer to tell his/her own version of the story, or read one of the many versions available. If you have access to the Internet, the children may enjoy watching Jack and the Beanstalk videos online.


  • How did Jack and his mother get what they needed to live each day? (The sold the cow's milk at the market.)
  • When the old cow no longer produced milk, what did Jack's mother decide to do? (Sell the cow.)
  • Where did Jack get the magic beans? (He bartered - traded - the cow to an old man for them.)
  • Why was Jack's mother angry with him? (He'd traded for something she thought was worthless.)
  • Why did Jack take the goose? (She laid golden eggs.) Was it right for him to steal the giant's goose? (No.)
  • What do you think Jack and his mother did with the goose's golden eggs? (They sold them for what they needed to live.)

Reproducible: Before Money

Make copies of the reproducible. You may wish to identify the pictures with the children before they complete the worksheet as an independent activity. Or complete as a whole-group activity. The answers may be found here.


What's wampum? The Wampanoag Indian word for beads made from whelk or clam shells was wampumpeag, from which the word wampum came. The rare shells were ground into cylinder-shaped beads and drilled with a hole; they then could be strung on necklaces or woven into belts or collars. In 1637, the Massachusetts Bay Colony declared wampum legal tender (acceptable as money). Purple wampum beads, made from quahog clam shells, were worth twice as much as the white ones made from whelk shells. One bead could buy a beaver pelt.


Part 3: Money Then and Now

Materials Needed:

  • One or more real or plastic coins of each denomination, including a dollar coin.
  • Dollar bill.
  • Clean adult athletic socks.
  • Copies of the reproducibles, Can You Buy It? and Money Flash Cards.

The roots of modern money are in China, where coins and paper money have been traded for thousands of years. Metal models of seashells and tools, the first trade tokens, have been found in China, dating back to about 1000 B.C. The world's first true coin was probably minted around 600 B.C. in what is now modern-day Turkey. Leather money originated around 100 B.C., paper money about 800 A.D. 

While America was under English rule in the 1600s and 1700s, colonists traded in English, Spanish and French money. After declaring independence in 1776, the United States needed to make its own money. The Coinage Act of 1793 established the U.S. Mint. The first coins were minted shortly afterward and about half those denominations are still used today.

Show some U.S. coins. Help the children identify each and tell its worth. (If you made copies of Money Flash Cardsyou may want to have the children find and color each coin's cards as you discuss them.) 

  • Penny = one cent.
  • Nickel = five cents.
  • Dime = 10 cents.
  • Quarter = 25 cents.
  • Half dollar = 50 cents.
  • Dollar coin = 100 cents. (Display a one dollar bill and tell them that the dollar coin and the dollar bill are equal in value.)


  • Why is it important to know about coins and their values? (Possible answers: It helps to understand how much money to save to buy what they want; it keeps people from being short-changed by a store clerk, etc.)
To help children identify coins, the following information may be helpful. (If desired, have a magnifying glass available for a closer look.)
  • Penny - small, thinner, lighter, smooth edge.
  • Nickel - small, thicker, heavier, smooth edge.
  • Dime - smallest, thin, reeded edge.
  • Quarter - medium-sized, reeded edge, narrow rim.
  • Half dollar - largest, reeded edge.
  • Dollar - medium-sized, varied edges (for example, the golden dollar has a smooth edge and the presidential dollar has inscriptions on the edge), wide rim.
Activity: Sensing Cents
Display some coins and ask students to identify each. Then place real or plastic coins in one or more clean adult athletic socks. Invite the children to identify the coins by touch. Display each coin's distinctive characteristics on a board or poster as a reminder.
If you have access to the Internet, the children may enjoy this cartoon of how a new coin is made. 
Why reeded edges? Smooth-edged pennies and nickels are less valuable. When coins were made of precious metals, grooved or reeded edges discouraged people from filing down the edges to get some of the metal. Today, smooth and reeded edges help people who are visually impaired distinguish between coins.

Reproducible: Can You Buy It?

Make copies of the reproducible. You may wish to count the coin values and complete the worksheet as a whole group. (Students will need to be able to count by 1s, 5s and 10s to do this activity.) The answers are found here.


Reproducible: Money Flash Cards

Children at this level usually need practice in identifying and counting money and making change. The games below provide practice in money skills. Make copies of the reproducible for this purpose. You may wish to have the children appropriately color the coins on the cards. 

  • Money Counts - two or more children. Use one set of flash cards. Deal cards evenly. Each player counts up his money (hint: start with the coin of highest value). The person with the highest coin total wins.
  • Money Bingo - large or small group activity. Each child folds a sheet of notebook paper in halves, then quarters, lengthwise. Unfold. Repeat the folding widthwise. Randomly fill the 16 spaces with 1¢, 5¢, 10¢, 25¢, 50¢ and $1. The leader uses one or more sets of cards to call bingo. Use corn kernels, etc., for markers.
  • Money War - two or more children. Deal one or more sets of cards evenly. Each player's cards are kept face-down in a pile. The players take turns turning over their top card. The card with the highest value wins the opponents' cards. If two or more high cards match, war is declared and those players turn over their next card. The highest card wins all cards on the table. The player who eventually has all cards wins the game.