EARNING, SPENDING / PRODUCING, CONSUMING
From beads to bank notes, money has changed a lot. Now that you know a little about the history of money its time to learn about how today’s money makes the world go round. • How do most people get money? • What do people spend their money on? • Am I a consumer or producer? Read on to find answers to these questions and more.
Making Money (no not printing it, earning it!)
When you were very young you may have thought that everyone could press some buttons on an Automated Teller Machine and money would pop out. The fact is, money does not grow on trees and money does not just pop out of an ATM automatically! People need to earn money. If you are old enough you may have a part-time job, or you may have earned money raking leaves, babysitting or delivering newspapers. Money earned from all of these activities is called income. You can also earn income if you keep money in the bank or purchase some investments that earn interest. Even $20 from your aunt on your birthday can be called income. Most adults get their money by working for it. A person who works for someone else is an employee. The company or person that an employee works for is the employer. An employer pays a salary or a fixed sum of money to its employees on a regular basis.
Goodbyes or Good Buys?
Have you ever bought anything? Junk food? A pair of jeans? Music? Have you ever paid for a haircut or a bus ride? If so, you are a consumer – someone who uses or consumes goods and services. A producer on the other hand is someone who makes goods or provides services. It is very easy to be a consumer but it takes some thinking to be a smart consumer. To get the most for your dollar:
• Be aware and compare
That is, become a comparison
shopper. Read labels, check ingredients, and don’t be taken in by package size – compare the amount of contents contained within the packaging. At the grocery store check the shelf labels which will tell you how much a product costs per gram or litre. For big ticket items like electronics and appliances compare the warranty offered with each product. Sometimes a product that costs more may be a better deal because it comes with a better warranty. A warranty is a guarantee that the company who made the product or the business that sold it will fix or replace the item if anything goes wrong within a certain amount of time.
• Beware of misleading advertising
Advertisements appear in newspapers and magazines, on billboards and buses, on television and on radio, on street benches and before movies or video streams. They are EVERYWHERE! Although ads can be useful they can also be misleading. For instance is that picture of a hamburger in the newspaper ad really the size of the hamburger you would purchase at the restaurant advertising the food product? Is the claim made by a company that, “Everyone is buying their perfume” really true? Does the commercial or print ad use words like: “Part of...”“The taste of real...”“Natural...”“New, better tasting ..... ” “Because we care...”There are hundreds of these deceptive sayings – beware! • Understand your needs and wants
This is another key point about being a smart consumer. You need to be able to understand what is important to you and why. What are the things that you absolutely cannot live without and what are the things that would be nice to have but are not required for your survival? Save, Spend, or Share? When you have money, the first choice you need to make is whether or not to spend it. How much you spend and how you spend it is up to you. Whether or not you save some and how much you save is also up to you - as is any decision you might make about sharing some of your money. You might choose to share some of your money by spending it on a birthday gift for a friend, participating in a fundraiser or donating some to a charity. The choices people make about money are very personal. What one person deems is important may not be as important to another. Generally though, people look to pay for their needs first then make decisions about spending their money on wants and/ or sharing their money. You will learn more about this in the next instalment when we take a look at budgeting!
1. Consumers have many wants and needs. The things we must have to remain healthy and safe are needs while other things that make life easier or provide enjoyment are wants. Look in your newspaper for pictures of five things that you would classify as needs and five things you would classify as wants. Post in a classroom display and compare with those your classmates collected. 2. Do you remember reading about farmers, carpenters, blacksmiths, potters, weavers and similar trades people? Although some of those trades exist today there are many more that didn’t exist even 100 years ago or even 50 years ago. Was there such a thing as an airline pilot in 1920? How about an astronaut? Web designers, software designers and computer technicians were jobs that did not exist in 1965 – do you know why? Look in the help wanted ads in today’s paper and on Workopolis. What jobs are listed there? Which jobs might not exist 20 years from now? 50 years from now? Discuss as a class.
Speaking about jobs, spending and sharing money, take some time to review the notes you recorded for your fundraising plan earlier. Who will do what? Your task today is to assign jobs. Start by coming up with a list of jobs and what responsibilities each of those jobs entail. For example: • Event Facilitators (run any games/events you plan to have) • Collectors (collect items needed for any of the games/
events you plan to have) • Set-up and Take-down crew (set up and take down all
materials required for games/events) • Decorating/Signage Team (create and put up any signage
or decorations required at event(s) Then work backwards from the schedule you created earlier to determine deadline dates for each job/task. Record these on chart paper. (Note that each of you will also be part of the marketing team that will be designing a campaign to promote your fundraiser but this will be addressed in the next installment of Money $1.01)