Grades K, 1, 2, 3, 4

Earning Income

Buying Goods and Services

Saving

Using Credit

Financial Investing

Protecting and Insuring

People have many different types of jobs from which to choose. Different jobs require people to have different skills.

People earn an income when they are hired by an employer to work at a job.

Workers are paid for their labor in different ways such as wages, salaries, or commissions.

People can earn interest income from letting other people borrow their money.

People can earn income by renting their property to other people.

People who own a business can earn a profit, which is a source of income.

Entrepreneurs are people who start new businesses. Starting a business is risky for entrepreneurs because they do not know if their new businesses will be successful and earn a profit.

Income can be received from family or friends as money gifts or as an allowance for which no specified work may be required.

Income earned from working and most other sources of income are taxed. The revenue from these taxes is used to pay for government-provided goods and services.

Economic wants are desires that can be satisfied by consuming a good, a service, or a leisure activity.

People make choices about what goods and services they buy because they can't have everything they want. This requires individuals to prioritize their wants.

People spend a portion of their income on goods and services in order to increase their personal satisfaction or happiness.

Whenever people buy something, they incur an opportunity cost. Opportunity cost is the value of the next best alternative that is given up when a person makes a choice.

Informed decision making requires comparing the costs and benefits of spending alternatives. Costs are things that a decision maker gives up; benefits are things that a decision maker gains.

People's spending choices are influenced by prices as well as many other factors, including advertising, the spending choices of others, and peer pressure.

Planning for spending can help people make informed choices. A budget is a plan for spending, saving, and managing income.

Income is saved, spent on goods and services, or used to pay taxes.

When people save money, they give up the opportunity to spend that money to buy things now in order to buy things later.

People can choose to save money in many places—for example, at home in a piggy bank or at a commercial bank, credit union, or savings and loan.

People set savings goals as incentives to save. One savings goal might be to buy goods and services in the future.

A savings plan helps people reach their savings goals.

When people deposit money into a bank (or other financial institution), the bank may pay them interest. Banks attract savings by paying interest. People also deposit money into banks because banks are safe places to keep their savings.

Interest is the price the borrower pays for using someone else's money.

When people use credit, they receive something of value now and agree to repay the lender over time, or at some date in the future, with interest.

By using credit to buy durable goods—such as cars, houses, and appliances—people are able to use the goods while paying for them.

Borrowers who repay loans as promised show that they are worthy of getting credit in the future. A reputation for not repaying a loan as promised can result in higher interest charges on future loans, if loans are available at all.

After people have saved some of their income, they must decide how to invest their savings so that it can grow over time.

A financial investment is the purchase of a financial asset such as a stock with the expectation of an increase in the value of the asset and/or increase in future income.

Risk is the chance of loss or harm.

Risk from accidents and unexpected events is an unavoidable part of daily life.

Individuals can either choose to accept risk or take steps to protect themselves by avoiding or reducing risk.

One method to cope with unexpected losses is to save for emergencies.