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Spending and Saving

Piggy bank and is stacked coins


For many of us, money is a scarce resource in our lives and so we must save, spend and shop smartly. We must put aside some money for short-term (big bills later in the year) and long-term future needs (new car). We must distinguish our needs from our wants (spending choices) then shop for the best value.

Skill Definition:

I am a smart saver, spender and shopper:

  • I have the discipline to save for later needs. I “pay myself first”. I understand the power of compound interest and use it to my advantage.
  • I know my family’s needs and wants. I can sacrifice short-term wants for long-term needs.
  • I comparison shop. I have mental power over purchases and don’t waste money on a whim.

Key Learning Points:

  • Be able to distinguish wants from needs.
  • Practice “buying skills” every day.
  • Give, save, spend. Savings must be a priority.
  • Use on-line shopping resources to pre-plan big expenses.

Faith Worldview:

Learning Path:

  • Develop a budget. Classify each spending category as a “need or want”. If necessary, look deeper into each category, e.g. are all groceries a need?
  • Pay yourself first. Write your first bill to “savings”.
  • Keep track of spending for a month or more. Make sure each dollar spent fits with a budgeted category and amount.
  • Find and use internet sites to do pre-buying homework. Amazon.com is a good one since it’s easy to see prices and customer reviews.

Deeper Topics:

  • Spending vs. Shopping vs. Saving:

o   Smart Spenders spend money on the right things with an emphasis on needs, not wants. A smart spender knows they don’t need something.
o   Smart Shoppers know how to buy the right things at best value.
o   Smart Savers know how to limit short-term spending to save for longer-term needs. They “pay themselves first”. Pay yourself first means to put money aside for savings before the bills are paid.

  • Needs vs. Wants: Needs typically include housing, food, clothing, medical and transportation but even these can be refined. One person may have a basic phone as a need to get a job yet another whose job depends on the internet may say a smartphone is a need. It’s easy to fool yourself or relent to the endless marketing.
  • Things to Save For: Savings likely includes an emergency fund, periodic expenses (taxes, Christmas gifts), major purchases (furniture, car, vacation), education or retirement. Saving in advance is a requirement if you want to avoid debt.
    • Savings Tips:
    • Smart spending and smart shopping is the pre-requisite.
    • Make good daily decisions…coffee, lunch out, cigarettes.
    • Key track of your spending.
    • Pay yourself first. Take your next pay increase and put it towards long-term.
    • Automatic transfer to savings or 401K. This is a great way to pay yourself first.
    • Spend money on people, not things.
    • Sell something. But it’s better to not have bought a few things in the first place if money is tight.
    • Take advantage of compound interest. Start saving early in life (but it’s never too late).
  •  Shopping/Buying Skills:

o   Know the places (and times) where you can find great deals.
o   Pre-shop….price and specs.
o   Be willing to negotiate: Use the power of cash. Have patience, be able to walk away. Ask: Is that your best price?
o   Do not but on impulse. Wait 24 hours before making a big purchase.
o   Buy with cash (or debit), not credit.
o   Do not pay extra for a “name”.
o   Recognize the high price of convenience.

  • The power of compound interest. Saving even just a small amount of money every week can eventually turn into a sizable pile of cash over time. See this graphic on MSNMoney.com
  • Record Keeping: Have a safe place (locked file drawer, fireproof safe or bank safety deposit box) for your important papers.

o   Personal records…diplomas, social security, birth certificates, marriage license, etc.
o   Insurance policies.
o   Tax info…receipts, tax forms, paycheck stubs, W-2, etc.
o   Bank records…statements, account numbers.
o   Medical and drug bills.
o   Investment documents.

Exercises for Older Teens and Adults:

  • Needs vs. Wants. Use the below worksheet to look at all of your spending categories. Force yourself to categorize more money into “wants” until you have 15% or more of your take home pay available for savings.
  • Smart Shopper Exercise.
  • List ways you can improve your short-term savings (do you have an emergency fund?).

Exercises for Younger Teens (13-16):

  • None at this time.

Questions to Encourage Critical Thinking:

  • Do you have a budget? If not, why not?
  • Do you set aside 15% or more of your take home expenses for savings? If not, do a more ruthless “needs/wants” exercise.
  • Where do you have some wasteful spending habits.

Tools and Templates:

Word Definition:

  • Want. Desire something: to feel a need or desire for something.
  • Need. Require something or be necessary: require something in order to have success or achieve a goal.
  • Compound Interest. Interest that is calculated on the combined total of the original sum borrowed principal and the interest it has already accrued.

Web Sites/Web Articles/Short Stories/Essays:




Faith-Based Quotes:

  • “Honor the Lord with your wealth and with the first fruits of all your produce.” – Proverbs 3:9 (ESV)
  • “And he said unto them, Take heed, and beware of covetousness: for a man’s life consisteth not in the abundance of the things which he possesseth” – Luke 12:15 (KJV)

Other Quotes:

  • “Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.” – Will Rogers
  • “Money is not required to buy one necessity of the soul.” – Henry David Thoreau
  • “You cannot keep out of trouble by spending more than you earn.” – Abraham Lincoln

One-Point Lessons:

Related Skills:

Summary 2-page Lesson Examples, coming soon):

  • Money Management – Spending and Saving (handout).
  • Money Management – Spending and Saving (with instructor notes)