Lesson 3

Money Management


Lesson Goal:

To teach students helpful money management skills to utilize for a lifetime.


Lesson Objectives:

  • Understand what credit is and how it works.
  • Describe three ways to save money.
  • Become familiar with the price of everyday products.
  • Know how to plan a budget.


Content Standards Addressed:

Common Core State Standards

National Standards


Money management is the ability to budget money in an efficient and productive manner. This is very difficult for teenagers to do. Managing money may be difficult, because teenagers do not work with budgeting and savings plans on a regular basis. Teenagers are also bombarded with advertisements through television, magazines, newspapers and online.

One of the most important factors teens need to know about money is that teens need to have money in order to spend it.

Using Credit:

People are often persuaded to buy things on credit and pay later. What is often misunderstood is that using a credit card is like taking out a loan. Interest must be paid in addition to the original amount if a credit card is not paid off each month.

Interest is a percentage paid to the credit card company for loaning money. Different credit cards have different interest rates.

For example, a purchase of $1,000 on a credit card with 18 percent interest can take over eight years to pay off, if only the minimum balance is paid every month. The minimum balance is the least amount of money that needs to be paid each month. Most credit cards charge 2 to 4 percent of the outstanding balance. To play it safe, only use a credit card in emergency situations.


Saving Money:

Saving money helps to plan for a financially secure future. Placing money into a savings account earns more money if money is not taken out.

Savings accounts accrue interest over a period​ of time. When saving, the bank pays a certain percentage of the money being held. This is called interest. For example, if $100 is deposited in an account and left for a year, it will increase to $103 at an 3 percent interest rate. Interest rates vary. Some savings accounts require a minimum dollar amount to open an account.

A checking account is another place to store money. It teaches budgeting skills because of the immediate access to the money and the running balance that is kept.


Money management tips include:

  • Be aware of product prices, even if adults are paying.
  • Shop around for better prices, instead of buying the item the first place you find it.
  • Look through the ads in the newspaper to be aware of the cost of different products.
  • Have a set amount of money that you will spend each week.
  • Plan a budget for high-priced items that you would like. These may include an expensive game system or outfit.
  • Have a set amount of money that you save every month.
  • See if your parents will set up a plan to match a percentage of the money you save.
  • Get a part-time job and save half of the money. In a year, see how much you have saved.


Ways to save money:

  • Wait until movies come out on DVD to rent them.
  • Get books from the library instead of buying them.
  • Tell your parents you want to save money by taking a sack lunch. Keep the savings for something you really want.
  • Instead of giving gifts, make something or use one of your talents as a gift.
  • Recycle plastic, glass and paper to earn money.
  • Collect change.



Wants vs. Needs

1. Divide participants into groups.

2. Discuss with the groups what the difference is between a want and a need.

    A want is something you would like to have, but do not need to survive.

    A need is something you need to have to survive - shelter, food and clothing (not an extreme amount).

3. Have the students take out a piece of paper and make two columns on the paper. Label one "Wants." Label the other "Needs."

4. Have students make a list of the things they would like to have under the "Wants" column.

5. Next have the participants write down all of the things they feel they need to survive under the "Needs" column.

6. Make a master list and discuss how this applies to money management.


Reproducible: How Much Does It Cost?

1. Determine the current cost of the items shown on the How Much Does It Cost? reproducible.

2. Provide a copy of the How Much Does It Cost? reproducible to each student. 

3. Have the participants fill out the worksheet.

4. Give students the answers.

5. Discuss the answers with the participants. Did they think the prices were higher, lower or about the actual amount?

6. Discuss how long it will take the participants to save for some of these items. Discuss the amount of money their parents must spend on essential items, such as cleaning supplies and household supplies.  


Reproducible: Let's Plan a Budget

1. Ask participants to name something they would like to purchase (clothes, video game, etc.).

2. Tell participants to find out how much the item they want costs. They can find prices on the Internet, in the newspaper or at the store.

3. How much money do students earn? How much of it do they save? How much is spent weekly/monthly? Based on those figures, how long will it take them to save for the item?

4. Have them look at the sample budget provided on the reproducible Let's Plan a Budget.



1. Recruit people to bring in Monopoly games.

2. Break the group into teams to play Monopoly.

3. This game is a great way to teach money skills.


Leader's Fast Facts:

1. Many banks offer special services for teens. Modern Woodmen Bank offers a young banker's savings account. Some of the services included are free online banking, no minimum balance and no monthly service charge. Only $25 is needed to open an account, and interest is earned daily.

2. Teens surveyed by Teenage Research Unlimited reported spending 98 percent of their money, rather than saving it (2003).

3. A Consumer Reports survey of 12-year-olds found that 28 percent didn't know that credit cards are a form of borrowing; 40 percent didn't know that banks charge interest on loans; and 34 percent didn't know that you can't tell how good a product is by how much it's advertised (2003).


Additional Resources:

Motley Fool Investment Guide for Teens: 8 Steps to Having More Money Than Your Parents. By David Gardner, Tom Gardner and Selena Manajian. Fireside Publishing, 2002.

Complete Idiot's Guide to Money for Teens. By Susan Shelly. Alpha Books, 2001.

TeenVestor. By Emmanuel Modu and Andrea Walker. A Perigee Book, 2002.​