Planned or Unplanned Spending? Cost and Benefits!

Planned or Unplanned Spending?

Spending is when we use our money to purchase goods or services. Planned spending is when we use our money on things that we know we will need or want, like rent, groceries, bills, and others. Unplanned spending is when things come up that we did not plan for, but need to spend money on. This could be friends inviting us to the movies, getting invited to a birthday party and needing to spend money on a gift, or it could be emergencies like going to the doctor or needing to repair a car. Each time we make decisions about money, there is a cost and a benefit. A cost is something you have to give up, like your money you spent, or if you choose not to spend money, then you may have to give up on something you want, like buying a game or toy, or not getting to go somewhere. Benefits would be something you get that's good. If I choose to spend money, then a benefit is I get to enjoy whatever I spent my money on. If I chose to save my money instead, then my benefit might be that I get to save money to buy something more expensive and better later on.

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John, Richie, and Kris each want to purchase a new bike. They each made a savings plan that would allow them to purchase the bike they wanted in eight weeks. Let's take a look at how they did.

Planned or Unplanned Spending?

I'm John. My plan was to put all of my allowance into my piggy bank. I followed my plan and did not spend any of my allowance on any other item. I met my savings goal.

What's a BENEFIT of his plan?

Not able to purchase a bike.

Able to purchase the wanted bike in the planned amount of time.

Needed to wait one week to purchase the bike he wanted.

Not able to purchase any items during the eight weeks.

Able to spend his allowance whenever he wanted.

Needed to purchase a less expensive bike at the end of eight weeks.

Able to make smaller purchases during the eight weeks.

YES!

John put all of his allowance (income) into his piggy bank (savings) and didn't spend it. He was able to purchase the bike!

I'm John. My plan was to put all of my allowance into my piggy bank. I followed my plan and did not spend any of my allowance on any other item. I met my savings goal.

What's a COST of his plan?

Not able to purchase a bike.

Able to purchase the wanted bike in the planned amount of time.

Needed to wait one week to purchase the bike he wanted.

Not able to purchase any items during the eight weeks.

Able to spend his allowance whenever he wanted.

Needed to purchase a less expensive bike at the end of eight weeks.

Able to make smaller purchases during the eight weeks.

YES!

In order to save, John had NO unplanned spending so he wasn't able to buy some things throughout the week.

Hey there! I'm Richie. My plan was to put all of my allowance into my piggy bank. After 2 weeks I decided to use some of my allowance to go to the movies. The following week, I chose to buy some gum and used the rest of my allowance to purchase a video game I wanted. I did not meet his savings goal.

What's a BENEFIT of his plan?

Not able to purchase a bike.

Able to purchase the wanted bike in the planned amount of time.

Needed to wait one week to purchase the bike he wanted.

Not able to purchase any items during the eight weeks.

Able to spend his allowance whenever he wanted.

Needed to purchase a less expensive bike at the end of eight weeks.

Able to make smaller purchases during the eight weeks.

YES!

Even though Richie didn't meet his savings goal, he was able to purchase things he wanted throughout the 8 weeks.

Hey there! I'm Richie. My plan was to put all of my allowance into my piggy bank. After 2 weeks I decided to use some of my allowance to go to the movies. The following week, I chose to buy some gum and used the rest of my allowance to purchase a video game I wanted. I did not meet his savings goal.

What's a COST of his plan?

Not able to purchase a bike.

Able to purchase the wanted bike in the planned amount of time.

Needed to wait one week to purchase the bike he wanted.

Not able to purchase any items during the eight weeks.

Able to spend his allowance whenever he wanted.

Needed to purchase a less expensive bike at the end of eight weeks.

Able to make smaller purchases during the eight weeks.

YES!

Richie spent all of his money and didn't save any money for his bike. Unfortunately, he doesn't get a bike.

Hello! I'm Kris. My plan was to put some my allowance in my piggy bank and planned on keeping $1.00 each week. I used only the money I kept out of my piggy bank to purchase other items. I met my savings goal a week later than John.

What's a BENEFIT of her plan?

Not able to purchase a bike.

Able to purchase the wanted bike in the planned amount of time.

Needed to wait one week to purchase the bike she wanted.

Not able to purchase any items during the eight weeks.

Able to spend her allowance whenever she wanted.

Needed to purchase a less expensive bike at the end of eight weeks.

Able to make smaller purchases during the eight weeks.

YES!

Kris is saving money, but because she kept $1 each time, she is able to make smaller purchases when she needs to.

Hello! I'm Kris. My plan was to put some my allowance in my piggy bank and planned on keeping $1.00 each week. I used only the money I kept out of my piggy bank to purchase other items. I met my savings goal a week later than John.

What's a COST of her plan?

Not able to purchase a bike.

Able to purchase the wanted bike in the planned amount of time.

Needed to wait one week to purchase the bike she wanted.

Not able to purchase any items during the eight weeks.

Able to spend her allowance whenever she wanted.

Needed to purchase a less expensive bike at the end of eight weeks.

Able to make smaller purchases during the eight weeks.

YES!

Kris was able to buy a bike, but because she was still spending a small amount, it took her longer to save her money. She had to wait a little bit longer until she saved up enough money.

Congratulations!

You did it! If your teacher asks you for a codeword, it is: money bags