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Budgeting Lesson: Needs and Wants

written by: Kathy Foust • edited by: Trent Lorcher • updated: 9/11/2012

This is a fun economics activity that helps students to understand the difference between needs and wants. This is a progressive project that the entire class will work on together.

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    Needs and Wants

    To begin this lesson plan, students should have some concept of money and how it is used. This Needs and Wants Lesson Plan will teach students first hand about how difficult it can be to balance money when it comes to choosing between needs and wants.

    To complete the activity in this lesson plan, teachers will need to have enough spreadsheets to provide each student with one. Teachers will also need an empty bucket or box of some sort. To begin the lesson plan, ask students to take out a sheet of paper and follow the instructions below.

    • Divide the paper into 10 evenly divided boxes.
    • In each box, write a different type of emergency situation.
    • Next to each emergency situation, write the potential cash cost of the situation.
    • Below each situation write the potential weekly cost for not taking care of the situation. For example, if one situation is "broken washing machine-cost $100", then the potential cost of the situation may be $20 a week spent at the laundromat.
    • Ask students to cut or tear the "boxes" into separate pieces so that instead of one sheet of paper they now have ten small pieces.
    • Ask students to fold and place the sheets into an empty container.

    Pass out the spreadsheets to the students. Ask student to write the following words at the top of each column on the spreadsheet; Income, rent, car payment, gas, electric, water, insurance, food, savings, emergencies and whatever other items you would like to add as part of their lesson. As students are doing this, prepare a sheet of rewards they can "buy". Get creative and write in things they would enjoy such as "10 minutes of MP3 time for $20" and other such items.

    Assign each student a weekly salary of $250. Allow students to participate in figuring out what the outgoing costs are. Ask them to divide the costs into weekly terms and fill in the spreadsheet for the first week. Then have students pick a paper out of the container. Students must figure in the emergency cost that is listed on the paper. Do this every week. Allow students to purchase a reward every week. Do this for a minimum of four weeks and base their end grade on what they have in savings at the end of the assigned period.

    This is a great way for students to learn to balance their budget according to wise choices between needs and wants. Make sure the students stick to realistic life concepts, such as knowing they need some sort of transportation to get to work and must eat to survive. At the end of the project, allow students to express to you what they have learned and how it affected their current real financial situation.

Budgeting Lesson Plans Series

This series teaches students abotu budgeting using a series of different formats to that students can learn how to take a variety of things into consideration when they are creating a budget of any type.
  1. Your Money, Your Community
  2. Budgeting Lesson: Needs and Wants
  3. Lesson on Personal Finances
  4. Plan an Event