Earning Income, Saving Wisely, and Spending Fairly: First Grade Social
Managing money responsibly involves three core habits: earning income through diligent work, saving money for future goals, and spending money fairly and thoughtfully.
The Money Cycle
Money does not grow on trees, and it does not come out of automatic bank machines for free. Money enters a person's life through hard work and good choices. Once money is earned, each person must decide how much to spend, how much to save, and how much to share.
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| THE THREE-PART MONEY PIE |
| |
| [ EARNED INCOME ] |
| | |
| +--------------------+--------------------+ |
| | | | |
| v v v |
| [ SPEND ] [ SAVE ] [ SHARE ] |
| For current needs For future goals To help others |
| and wants and emergencies in need |
+-------------------------------------------------------------+
Earning Income Through Work
Income is the money that a person receives in exchange for providing labor, skills, or goods.
Adults work at jobs as teachers, nurses, electricians, store managers, and software developers. In exchange for their time and skills, their employers pay them an hourly wage or a monthly salary. Some people start their own small businesses, such as a bakery or a lawn mowing company, earning income by selling products directly to customers.
Saving Wisely for the Future
Saving means keeping a portion of your money in a safe place instead of spending it immediately.
Why Saving Matters
Saving money prepares you for two things: big future goals and unexpected emergencies.
If you want a new bicycle that costs eighty dollars, you cannot buy it with ten dollars. But if you patiently save ten dollars every month, in eight months you will have saved enough to buy the bicycle! Saving teaches patience and self-discipline.
SAVING TOWARD A GOAL
Month 1: [$10] -----------------------------------------------> $10 saved
Month 2: [$10] + [$10] ---------------------------------------> $20 saved
Month 3: [$10] + [$10] + [$10] -------------------------------> $30 saved
...
Month 8: Eight months of patience! ---------------------------> $80 BICYCLE!
Safe Places to Store Savings
When you are young, you might save your coins and dollar bills in a ceramic piggy bank or a clear glass jar on your bedroom shelf. Using a clear jar allows you to watch the level of coins rise higher and higher as you add to it.
Adults store their savings in secure financial buildings called banks or credit unions. When money is placed in a bank account, the bank keeps it completely safe in vaults and computer systems, and often pays extra money called interest as a reward for keeping savings there.
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| SAVINGS TOOL | HOW IT WORKS |
+---------------------+---------------------------------------+
| Piggy Bank / Jar | Keeps cash visible in your bedroom |
| Bank Savings Account| Keeps money protected in bank vault |
| Emergency Fund | Money reserved exclusively for storms |
| | or unexpected repairs |
+---------------------+---------------------------------------+
Spending Fairly and Thoughtfully
Spending means exchanging your earned money for goods or services right now. Smart consumers spend their money wisely.
Comparison Shopping
Before you spend your money, it is wise to compare prices. Comparison shopping means looking at two or more stores to see who offers the best quality good for the lowest price.
If Store A sells a box of colored pencils for four dollars, but Store B across the street sells the exact same box for three dollars, buying from Store B saves you one dollar! That saved dollar can be put straight into your piggy bank.
COMPARISON SHOPPING IN ACTION
[ STORE A: $4.00 ] [ STORE B: $3.00 ]
Same box of 24 pencils Same box of 24 pencils
| |
v v
More costly! Smart choice! Saves $1!
The Three-Jar System: Save, Spend, Share
A popular and effective way for first graders to manage money is the Three-Jar System.
Whenever you earn money from chores or receive a birthday gift, you divide the coins into three labeled jars: Spend Jar, Save Jar, and Share Jar.
The Spend Jar is for small treats you want this week, such as a pencil topper or a sticker pack. The Save Jar is for larger goals that require weeks of saving. The Share Jar is money you set aside to donate to an animal shelter or food pantry to help others.
THE THREE-JAR SYSTEM
+----------+ +----------+ +----------+
| SPEND | | SAVE | | SHARE |
| JAR | | JAR | | JAR |
+----------+ +----------+ +----------+
Small treats Big goals Donations
for this week for the future to help others
Exercises and Review
Exercise 1: What is income, and how do adults earn it?
Exercise 1 Solution: Income is the money a person receives in exchange for their work, skills, or labor. Adults earn income by working at jobs—such as teaching, nursing, or driving buses—where employers pay them wages, or by owning businesses that sell goods and services to customers.
Exercise 2: Explain the purpose of each jar in the Three-Jar System: Spend, Save, and Share.
Exercise 2 Solution: In the Three-Jar System, the Spend Jar holds money for immediate small treats this week; the Save Jar holds money put aside patiently for expensive future goals or emergencies; and the Share Jar holds money set aside to donate to charities and community members in need.