Module 8 Money Basics

This lesson plan can be used as a companion to Module 8 of Money and Youth – Money Basics.

Relevant Subjects and Topics:

Business Studies, Family Studies, Economics, Entrepreneurship, Civics

Background Information:

As adolescents mature into young adults and enter the world of economics and finance, it is important for them to have a basic understanding of money, the role it plays and, to a degree, the way it influences our standard of living. This lesson plan will introduce the students to a basic understanding of money and the role it plays in our economy. It will also provide some basic information about the role the Bank of Canada plays in controlling our economy.

Outcomes:

At the end of this lesson, students will be able to:

• Explain what we use as money and the role that money plays
• Outline the basic characteristics of money
• Explain exchange rates and inflation
• Outline the basic role that the Bank of Canada plays

Time for Implementation:

One class period of about 60 minutes

Teaching and Learning Strategies:

Period One: 60 minutes

• Begin the lesson by asking the students to define the term “money.”
• Once they have done this, explain that money requires certain characteristics and plays important roles in our society – important enough that our society would find it very difficult to function if it were not for the existence of money.
• Indicate to them that this lesson will involve a study of money by using student triads to research various aspects of money and associated items, and to teach the researched material to their fellow group members
• The class will then be given a short answer quiz to test how well they completed their tasks.
• Divide the class into triads (groups of three) and assign the following three tasks to the groups:
  • TASK ONE: Define the following terms: intrinsic value, fiat money, bartering, exchange rates. Outline the four specific characteristics of money.
  • TASK TWO: Explain what roles money serves for us.
  • TASK THREE: Explain the role that the Bank of Canada plays.
• Have each member of the triad assume responsibility for one task.
• Allow the triads some time to research and present their findings.
• Once they have completed their tasks have them put all materials away and hand out the short answer quiz found below under Handouts/Resources.

Handouts/Resources:

• Quiz on Money

Evaluation:

• The short quiz can be collected and marked.

Modifications or Suggestions for Different Learners:

• If need be, the triad member’s research could be in written form for the other members. The quiz could be given orally to anyone requiring such an adjustment.

Additional Related Links:

• The Bank of Canada - https://www.bankofcanada.ca/about/
• The History of Money - https://www.investopedia.com/articles/07/roots_of_money.asp

Additional Possible Activities:

• The students could research the history of money and prepare a display board showing their findings.
• The students could explore other currencies and compare it to the Canadian currency system.
• The students could research what other countries still use in place of fiat money.
• The students could study inflation in Canada and follow the inflation rate for a predetermined amount of time.

Why is this important?

Our attitude towards money is one of the greatest determinants of our happiness. Obsession with money demeans all other possible enjoyments in life. A flippant, carefree, spendthrift attitude usually results in financial woes that can destroy the possibilities of a life of happiness and fulfillment. So, what is the answer? The answer lies in our knowledge of money, its characteristics and role and its true value to our goals and aspirations. However, an individual views life and happiness, there is little doubt that money will play a big part in their lives and everyone must understand how to best use it to meet their desired outcomes.

Ways to engage your child and fun things to do.

If your son or daughter is to use money properly, they need to understand its role, characteristics, and its true value. The following activities can be used to aid us in helping our children understand those things.

1. Sit down with your son or daughter and ask them to explain what money is. Essentially, it is a medium of exchange and that, in one way or another, is the answer you are going to get. Money, however, is also a store of value and a unit of exchange. (See website below). Once you have established that money is a medium of exchange ask them to identify the value of money as they see it. With this as background, ask them to identify an item that they would like to purchase. Establish what this item would cost and then ask your son or daughter how much an hour they earn with their job. (If they do not have one develop a theoretical job and establish a realistic hourly wage.) Using this hourly wage, convert the cost of the item into hours of work required in order to cover the cost. Now ask your child if the object is worth that time and what it is they could have been doing if they hadn’t had to work that time to purchase the item. See if their attitude to the item has changed.
2. Watch the video, “What gives the dollar bill its value?” https://www.youtube.com/watch?v=XNu5ppFZbHo and discuss it with your child.
3. Ask your son or daughter to identify an item that they are considering purchasing and the cost involved. Have them explain how much money they can save each week towards the purchase of that item. Talk with them about ways they could increase their savings. Also, discuss with them whether or not a less expensive model or substitute is an option in order to avoid that protracted savings approach.
4. Use one of the following quotations about money to start a discussion with your child about the role money plays in our lives:
   • “Money doesn’t grow on trees”
   • “Money can’t buy happiness”
   • “Money makes the world go round”
   • “A fool and his money are soon parted”
   • “Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver” (Ayn Rand)
   • “Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.” (Will Rogers)
   • “Don’t think money does everything or you are going to wind up doing everything for money” (Voltaire)
   • “The person who doesn’t know where his next dollar is coming from usually doesn’t know where the last one went”
5. Ask your son or daughter if they know what inflation is. (A rise in the average price level of goods and services in the economy). Once you have a definition, watch the following YouTube presentation on inflation and then talk about the impact inflation has on our lives. https://www.youtube.com/watch?v=WZ_OyroIQc0

Additional Background and Related Websites and Resources

• What is Money - http://www.imf.org/external/pubs/ft/fandd/2012/09/basics.htm
• 3 Ways to Teach the Value of Money to Teens - https://www.fool.com/personal-finance/2015/02/13/3-ways-to-teach-the-value-of-money-to-teens.aspx
• Bank of Canada Videos - https://www.bankofcanada.ca/banknotes/bank-note-videos/