Lesson 5

Spending My Money


Lesson Overview:

Lesson 5 covers: 1) producers and consumers; 2) goods and services; 3) needs and wants; and 4) making buying decisions.


Lesson Objectives:

The children will:

  • Define producer and consumer.
  • Tell the difference between a good and a service.
  • Contrast needs with wants.
  • Explain that a purchase involves a series of important choices.


Content Standards Addressed:

Common Core State Standards

National Standards



  • Consumer - a person, group or company that uses goods (products) and services.
  • Need - a good or service that is necessary to live.
  • Producer - a person, group or company that makes goods or provides services to sell to consumers.
  • Service - work provided for the good of others.
  • Want - a good or service that is nice to have, but is not necessary in order to live.



To reinforce Lesson 4, review these points:

  • A portion of each dollar received or earned may be set aside for charitable giving.
  • Volunteering is a way to share with others.
  • Loaning people money and other things should be done wisely.
  • Gift-giving doesn't require spending money. 

Part 1: I Am A Consumer

Materials Needed:

Hold up one of the lemons. Ask:

  • What fruit is this? (A lemon.)
  • Where do lemons come from? (From grocery stores.)
  • Where do grocery stores get the lemons they sell? (They buy them from lemon growers - farmers who grow lemon trees in order to sell the fruit they produce.)


Because lemon growers make, or produce, something - lemons - that people want to buy, they are called producers. Producers include:

  • Farmers and those who harvest natural resources like timber.
  • Factories that make products.
  • Stores that sell products factories make.

Invite the children to look around the room.Make a list of five to 10 things they see - equipment, supplies, food, etc. Try to include a variety of items. Your list might include furniture, snacks, telephone, toys, lights, clothing and a TV. These items are products that can be purchased at a variety of stores. The products that producers make available to shoppers are known as goods. Write "Goods" at the top of the list.

Not all producers sell goods. Some sell services. A service is work done for people who are willing to pay for it. Point to the words lights, telephone and TV on the Goods list. All these goods can be purchased from a producer like an appliance store, but they're useless unless producers provide services that will power them. Lights need electrical service, telephones need telephone service and TVs need cable TV service.

Ask: Who buys goods and services? Everyone! People who buy goods and services are called consumers.


Activity: Making Lemonade

To summarize this part of the lesson, make some lemonade using your favorite recipe. Divide the work into groups of lemon rollers and juicers, sugar measurers and adders, lemonade stirrers and servers in order to include all the children. (It might be best for you to pour!) To expand the children's understanding of producers and consumers, consider inviting and sharing the lemonade with another class, staff or administration, or parents.


  • Who made this lemonade? (We did.)
  • Is this lemonade a good or a service? (A good.)
  • Since we made the lemonade, are we consumers or producers? (Producers.)
  • Others are joining us today. They didn't make the lemonade, but they will enjoy it with us! Are they consumers or producers? (Consumers.)


Reproducible: Old-Fashioned Lemonade 

If making real lemonade isn't practical, make a copy of the reproducible and cut apart the pictures. Discuss how to make lemonade while you review the vocabulary words consumers, producers and goods. 

Part 2: I Have Needs and Wants

Materials Needed:

Long ago, people grew or made most of what they needed to live. If they needed or wanted other goods, they might buy them from a general store. General stores carried food, clothing, kitchen utensils and many other items, but they weren't as big as today's stores and didn't have as much of a selection.

Today, cities have many stores that sell thousands of items. How do consumers decide what to buy from all the goods and services that are available? To make good buying decisions, we must be able to tell the difference between our needs and wants:

  • Needs are goods and services we must have in order to live.
  • Wants are goods and services we'd like to have, but they aren't necessary for us to live.

What things do we need in order to live? Needs help keep us healthy and safe, or help us do something we must do (like go to school or work). Make a list of needs and if possible, write them on a board. The list could include healthy, nutritious food; water; clothing; housing; education; transportation; and medical care and supplies.

Many items sold in stores today aren't necessary, but they help us enjoy our lives more. These are called wants. Make a list of wants. The list could include toys; foods like candy and snacks; designer clothes; and entertainment like movies and video games.

If the children are having trouble deciding if something belongs on the Needs or Wants list, ask, "If you couldn't buy this good or service, would it harm you in some way?" If the answer is "No," the good or service is a want.

For more practice in recognizing needs and wants, read the following situations and ask the group to decide whether the good is a need or a want.

  • Jacob's dad accidentally ran over his bike with the car, and it can't be repaired. Jacob rides his bike to school every day. Is a new bike a need or a want?
  • Alyssa already has a good pair of gym shoes that fit well, but she's asked her family to buy her some expensive gym shoes like her friend Emma's. Are these new gym shoes a need or a want?
  • Ethan's lunchbox is broken. He takes his lunch to school each day. Is a new lunchbox a need or a want?
  • Jacob lost his last pencil today at school. Are new pencils needs or wants?
  • Emma loves chocolate, and she sees her favorite candy bar in a vending machine at the store. Is the candy bar a need or a want?

Sometimes, wants can become needs. Alyssa didn't need the expensive gym shoes because she already had a good pair. The expensive gym shoes were a want.

But suppose one day Alyssa told her family that her feet really hurt whenever she ran in gym class. Her family took her to the doctor and found out her feet were hurting because they needed extra support. The doctor recommended buying her some special gym shoes that were very expensive. Alyssa's expensive gym shoes then became a need.


  • What goods did your family buy the last time you shopped together? Were the goods needs or wants?


Reproducible: Needs and Wants

Reproducible: Needs

Reproducible: Wants 

Make copies of the reproducibles. You may wish to do these worksheets as a whole-group activity so the children clearly understand why each item is a need or a want.

Part 3: I Can Make Good Choices With Money

Review the saving and sharing guidelines from Lesson 3 and Lesson 4:

  • How much should people save of each dollar they receive or earn? (About half.)
  • How much may be set aside to share with others? (A small percentage.)
  • Can people save or share more if they want to? (Yes! These are just rough guidelines.)

After putting money aside to save and share, about 30 to 40 cents remains from each dollar we earn or receive. Spending this money wisely results from a process that starts long before a shopper leaves the house.

It's important for children this age to learn basic money skills, but spending wisely includes much more than identifying coins and knowing coin values and how to make change.


Reproducible: Be a Wise Consumer! 

Make copies of the reproducible, or draw a flowchart on a board. As you discuss the points below, in order, invite the children to color each shape in turn (or invite volunteers to color the shapes on the board with colored chalk or dry-erase markers).

  • SAVE - Color it green like money. When you save money in a bank, you're paying yourself!
  • SHARE - Color it purple like royal robes. Share a percentage from each dollar with others - it's an honorable thing to do!
  • COUNT - Color it orange like a brand-new penny. Count how much money you have to spend. Ask a family member to double-check the amount for you.
  • DECIDE - Color it yellow like a RAILROAD CROSSING sign. Decide if what you want is a need or a want. Is it necessary? Will it help you in school? Keep you safer? Help you be healthier?
  • (Want) WAIT - Color it red like a STOP sign. When buying a want, wait as many days as you are old. (For example, if you're 5 years old, wait 5 days.)
  • (Want) THINK - Color it yellow like a SLOW sign. Especially when buying a want, think about your purchase. Ask yourself: Do I really want to spend my money on this item? How long will I be happy with it?
  • PLAN - Color it blue like the sky. Plan for the future. Will you need this money soon for something else - like a gift for a family member or friend?
  • TALK - Color it red like a mouth talking. Talk with someone you trust about your buying decision. Ask, "Do you think this is a wise way to spend my money?"
  • SHOP - Color it green like GO on a stoplight. Shop at some stores, or shop online with an adult family member. Check out the item you want to buy. Where is it least expensive?
  • LEARN - Color it yellow like a light bulb that's turned on. Learn from your buying decision. Did you spend your money wisely? How can you make a better decision next time?


Song: Spend, Spend, Spend

The children may enjoy singing this song together about spending money. The tune is "Three Blind Mice."

Spend, spend, spend

How should I spend?

Goods and services

Never seem to end.

What are my wants?

What are my needs?

Should I buy a new toy or some sunflower seeds?

A consumer like me needs to think carefully

To spend, spend, spend. ​