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Teachers: PSHE: Money management

Last Updated: Tuesday March 28 2006 14:36 GMT

Managing your money


Parents should only give children pocket money once a week, instead of every day, to stop spending on sweets and junk food on the way to and from school, according to a government official.

Students discuss money dilemmas and devise saving tips.

Learning aims

By the end of the lesson, students should have a deeper understanding of:

  • The importance of money management
  • Ways of saving money

Explain to students that money management skills were ranked as the fifth most important area children could be taught about, coming behind English, maths, science and languages.

These are the results of a 2,424-people survey carried out by YouGov during March 2006.

Ask students:

  • Would you like to be taught money management at school?
  • Do you think it should be part of an existing subject? e.g. maths.
  • What other life skills would you like to be taught at school? e.g. cooking
Main activity

Money dilemmas

Ask the class how they spend their pocket money.

It could be being used in three ways:

  • Sharing - church or charitable donations, birthday presents for family or friends.
  • Spending - toys, sweets, clothing items and entertainment.
  • Saving - on average 10 to 20 per cent of pocket money is put away to save for something that costs more than their weekly allowance.
Divide the class into small discussion groups.

Pocket money

Cut up the ten situations on this worksheet. Allow each group to discuss the dilemmas and agree solutions.

Situation 1
You lend part of your pocket money to a friend. Your friend promises to pay you back tomorrow, but doesn't. It is a week later and you need the money. What should you do?

Situation 2
You lend money to a friend. Your friend repays you the borrowed money. A week later, the friend repays you a second time. What would you do?

Situation 3
You and your best friend go to the movies. Your friend wants to buy popcorn and doesn't have enough money. You have some extra money in you pocket. Describe what you would do and why.

Situation 4
You spend all of your lunch money on video games at the arcade on Tuesday afternoon. Now you don't have enough money for school lunches the rest of the week. How would you solve this problem?

Situation 5
Walking home from school, you find a wallet with 200 in it. The owner's details are in the wallet. What would you do?

Situation 6
You find a purse with 100 in it, but there are no details of the owner. What would you do?

Situation 7
You and your friend go to the movies. The price for children aged 10 and under is half price. You just had your 11th birthday. The ticket seller thinks you are under 10. What would you do?

Situation 8
You use the pay phone at school to call home. When you press the coin return, 7 in coins falls out in front of you. What would you do?

Situation 9
You put your pocket money in your coat pocket. That evening, you discover that the money is missing. You have lost it. What would you do?

Situation 10
Your mother asks you to go to the shop to buy two things she needs for supper. She gives you a 10 note. When you get home, what would you do with the change?

Extension activity

Students make diaries in which they keep a spending record for a week. They use it to keep track of where the majority of their money goes.

Categories of spending could include:

    One pound coins
  • food
  • clothes
  • cinema
  • games
  • hobbies
  • music
  • presents
  • donations

Students comment on how they would deal with individual money dilemmas.

Draw up a class list of saving tips:

Here are a few ideas.

They are adapted from the BBC's h2g2 site - an encyclopaedia written by the public.

  • Use 1 or 2 coins to buy inexpensive things. Take all the change you get and stash it in a jar or piggy bank. At the end of a month, you should have a nice little stash of money.
  • Open an bank account and put some of your pocket money into it each week.
  • Take snacks and drinks with you to school, rather than buying them from the tuck shop.
  • If you like fashion, buy cheap clothes. That way you won't break the bank each time you buy the latest must have item.
  • Don't be fooled by sales. You risk buying something you never needed in the first place.
  • Many stores place items by the cash tills in the hope you will buy on an impulse. Don't be taken in.
  • Do treat yourself but make sure the item is something you genuinely want,.
You can also help your folks to save money by:
  • Turning your TV off, rather than leaving it on standby.
  • Switching off the lights when you leave a room.

Teachers' Background

Two pound coins and 50p fifty pence pieces
Advice from BBC Parenting

Managing a mini-budget

Receiving pocket money also helps kids understand the value of money, and to start thinking about whether they want to spend it all straight away or save for a few weeks in order to buy something special.

What to give

While your child is at primary school, a fixed amount each week is reasonable, though you may also want to add some extra for buying special occasion things like birthday presents for family members. Some families also give their child a monthly allowance for clothes or bigger buys. Offer your child the choice of having pocket money in either weekly or monthly amounts.

Stick to the rules

Children have a strong sense of what's fair, so don't be seen to give in and buy extras for one child who's already spent all their money when your other child has had to save to buy their treats.

Ages and stages

Increase pocket money by a fixed amount on each birthday. Once your child's old enough to help out with basic household chores, you could arrange top-ups to pocket money in exchange for getting jobs done. As you children get older, they may want more expensive extras - trainers being a prime example. You could suggest you'll make up the difference if they contribute, say, three weeks' pocket money toward the cost.

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