A lesson plan to go with “Where does your money go?” from the September 2009 issue of L.A. Youth, in which teens write about what they learned about their spending habits when they tracked what they bought for a week.

By Amanda Riddle, co-managing editor

Grades: 7-12
Subjects: Language arts, social studies, life skills
Suggested Time Allowance: 45 minutes-1 hour

• copies of the L.A. Youth articles “It all adds up” and “Money Q&A” (one per student)
• pens and paper
• white board or blackboard

Students will examine what they spend their money on and learn how to spend their money more wisely.

When we brought up money at a recent meeting with our teen staff, everyone wished they had more of it. Alyssa said her friends make lists of what they need and how to get it. Teens always have been faced with the question of what to do with their money, but today’s bad economy makes those decisions even harder. Jobs are scarcer and parents have less money to give to them. At the same time, ads and messages in the media tell them to spend to fit in, whether it’s the latest gadget or a $100 pair of designer jeans. But they also need to save for things they need, like a car, college tuition or helping out their family. Teens need financial literacy to help them make good decisions about their money now and in the future, but they often don’t learn those skills in school.

Ask students what their attitudes are toward money. What does it mean to them? Does it mean security by providing them with their basic needs, does it give them independence so they can have fun with their friends and buy what they want, or does it help them reach their goals, such as going to college, living on their own or helping others? What are their goals for what they want to do with their money, both short term and longer term? What issues do they face as they decide how to spend their money?

Read the article “It all adds up” on page 11 and the interview “Money Q&A” on page 13, about what four teens learned when they tracked their spending for a week, and money tips from an expert.

Have students answer these questions as a class discussion:

What types of things did the four teens spend their money on?
• Food and snacks
• Hanging out with friends
• Clothes
• Movies
• A gift
• Transportation

What helped some teens spend less than others?
• They had learned good spending habits from their family. Michelle’s mom told her that buying generic items saves money; Ben’s aunt and uncle don’t eat out a lot, so he doesn’t either.
• They didn’t have a lot of money or didn’t want to borrow too much from their parents.
• They didn’t carry a lot of money with them.

What did they learn from the challenge?
• If you stay at home, you’re less likely to spend money.
• Small purchases add up.
• It’s easy to spend without realizing it.
• It’s hard to balance saving with wanting to spend money to have fun.

What tips does the Bank of America expert give for spending less and saving more?
• Determine wants versus needs.
• Ask what will happen if you don’t buy something. Or wait a few days.
• Make a list of what you want to save for so you’ll be less likely to spend on smaller, less important items.

Concluding discussion:
After reading the story and expert advice, have your students revisit their attitudes about money. What have they learned that will help them make better decisions? What changes can they make right now to save more?

Challenge your students to track their spending for one week. They should keep a spending journal and record everything they buy for seven days, preferably writing it down as they make their purchases or at least once a day so they don’t forget. After the week is over, discuss what they learned and how they could spend their money more wisely.

Extension activity:
Make a budget, which is a spending plan that teens can use to reach their saving goals. A spending worksheet is available to download for free from the Bank of America’s Morris Code website at http://promotions.bankofamerica.com/oncampus/themorriscode/. Have them fill in their income and the amount they spend on entertainment, food, clothing and other expenses. If they want to have more money to put in a savings account, they can adjust how much they plan to spend each month or decide to get a job to earn more money. Another financial literacy resource is the University of California’s Money Talks website at http://moneytalks4teens.ucdavis.edu/