F1.4 Explain the relationship between spending and saving, and describe how spending and saving behaviours may differ from one person to another.
Skill: Describing How Spending and Saving Behaviours Can Vary from One Person to Another
Spending and saving are closely linked. The link between spending and saving can be taught independently of the budget, however, by discussing isolated, less complex scenarios; for example, students may have already received money as a gift and may respond in a variety of ways.
- The student puts the money received as a gift in a money bank, a habit encouraged by their parents.
- The student, having seen an advertisement for an item endorsed by a respected personality, goes to the mall to get it.
- The person who gave the gift to the student inquires about the purchase that will be made. The student then seeks to make a purchase without having a specific desire in mind.
- The student has opened a student bank account as a result of a presentation from a local credit union at school. The money is deposited into their account and is earning interest.
- Having taken advantage of the activities organized by the community cultural centre, the student contributes to a fundraiser to improve the centre.
There are no right or wrong ways to manage money in this list; it all depends on the influences on the student. It is important for educators to approach this topic with sensitivity and not necessarily categorize spending or saving as "good" or "bad" decisions. It is impossible to know the financial situation or money management philosophy of parents or legal guardians, or recent spending by students' families. Viewing a purchase as a "bad" decision (for example, buying an expensive electronic device) may cause the student to feel guilt or remorse.