Unit 7 · Money and Choices

Picture two bags of rice on a shelf. One bag costs $3.00. The other costs $4.00. Which is the better buy? You cannot tell yet. A price is the money you pay. It is only half of the answer. The other half is the amount you get.

Now read the bags. The $3.00 bag holds 2 pounds. The $4.00 bag holds 5 pounds. The second bag costs more money. But it holds more than twice as much rice. For one more dollar, you get 3 more pounds. Now the $4.00 bag looks like the better deal.

Shoppers make one mistake more than any other. They look at the price and stop. A smart shopper asks two questions every time. How much does it cost? How much do I get? Only when you know both can you compare.

Two bottles of juice sit side by side. One is 64 ounces for $3.20. The other is 32 ounces for $1.92. To compare them, find the unit price. A unit price is the cost of one unit, such as one ounce or one pound. You find it by dividing the price by the amount.

Work it in cents so the math is cleaner. The big bottle: 320 cents divided by 64 ounces is 5 cents per ounce. The small bottle: 192 cents divided by 32 ounces is 6 cents per ounce. The big bottle costs 1 cent less for every ounce. That is the better deal.

The word per means "for each." Five cents per ounce means 5 cents for each ounce. Once every item has a unit price, you can compare them like runners in a race. The lowest unit price wins. Check your division twice; one slip can flip the answer.

Look at the shelf under any box in a grocery store. There is a small paper tag. The big number is the price you pay. Look closer. In smaller print, the tag usually shows the unit price too. It might say "20.0 cents per oz" or "$1.60 per lb." The store did the division for you.

Here is the catch. You must check that both tags use the same unit. One box of crackers might show cents per ounce. The box next to it might show cents per pound or per 100 count. You cannot compare ounces to pounds straight across. If the units do not match, do the division yourself.

Some stores do not print unit prices at all. Then you bring the math. Read the net weight on the package. That is the weight of the food inside, not the box. Divide the price by that number. A small notebook or a calculator on a phone works fine.

Many people believe the big package is always the better deal. Often it is. A big bag of rice usually costs less per pound than a small one. But not always. Stores know shoppers think this way. Sometimes the big size costs more per unit. Only the tag knows.

Try yogurt cups. A 6-pack costs $3.00. That is 300 cents divided by 6, or 50 cents per cup. A 12-pack costs $7.20. That is 720 divided by 12, or 60 cents per cup. The bigger pack costs 10 cents more per cup. Two 6-packs would be cheaper than one 12-pack.

There is one more thing to think about. A big bag of salad is cheaper per ounce. But if half of it wilts in the fridge before you eat it, you paid for food that went in the trash. A good deal is one you will actually use up. Buy the size your family will finish.

Two jars of peanut butter sit on the shelf. One has a famous name and a bright label. The other has the store’s own name on it. That is the store brand. Both jars hold 16 ounces. The name brand costs $3.20. The store brand costs $2.40.

Do the math. The name brand is 320 divided by 16, or 20 cents per ounce. The store brand is 240 divided by 16, or 15 cents per ounce. Now turn both jars around and read the ingredient list. Often the lists are nearly the same. Peanuts, salt, maybe a little sugar. You are paying 5 cents more per ounce for the label.

Store brands are not always the same. Sometimes the taste is different, and your family may like one better. That is a fair reason to pick it. The rule is not "always buy the store brand." The rule is "compare, then choose." Try the store brand once. If it works, keep the savings.

A coupon is a slip of paper or a code on a phone. It takes money off one item. A sale is a lower price for a short time. Both feel like winning. But a coupon on something you did not need is not saving. It is spending. Ask first: was this on my list?

Now do the math on a real one. A 20-ounce box of name brand cereal costs $3.00. You have a coupon for 60 cents off. The box now costs $2.40. That is 240 divided by 20, or 12 cents per ounce. The 20-ounce store brand is $2.20 with no coupon. That is 11 cents per ounce. The store brand still wins, even against the coupon.

Sometimes the coupon does win. A 60-cent coupon on a $2.40 item drops it to $1.80. That may beat the store brand. The point is to check, not to guess. Also watch "buy 2, get 1 free." Three boxes for $6.00 is $2.00 each. That is a real deal only if you will use three boxes before they go stale.

Stand in the checkout line. Look in the cart. Milk, bread, eggs, apples. Those are needs. A need is something a person must have to live and stay healthy. Food, a safe place to live, clothes for the weather, medicine. Now look at the candy rack by the register. That is a want.

A want is something nice to have but not needed. Wants are not bad. A treat, a game, a new pair of shoes when the old ones still fit. Every family enjoys some wants. The trouble comes when wants push out needs. If the candy means there is no money for milk, the order got mixed up.

Sometimes one item can be both. Shoes are a need. Shoes with a famous logo that cost twice as much are a want. The need part is "shoes that fit." The want part is "that brand." Smart shoppers pay for the need first. Then they decide if the want is worth the extra money.

The list starts before the store. Open the cupboard. Open the fridge. What is almost gone? Write it down. What meals will the family eat this week? Write down what those meals need. Check again. Do not write "cereal" if there are two boxes on the shelf.

Next, put the list in order. Most stores have the same layout. Fruits and vegetables near the door. Milk, eggs and cheese along the back wall. Boxes and cans in the middle aisles. Frozen food last. If your list follows the store, you walk it once. You do not go back for the eggs.

Write the amount next to each item. "Milk, 1 gallon." "Apples, 6." "Rice, 5 pound bag." A list with amounts stops the guessing. It also helps you estimate the total. If milk is about $3.00 and apples are about $4.00, you know before you go what you will spend.

Stores are designed by people who study shoppers. The candy sits by the register where you wait. The bright displays at the end of each aisle, called end caps, hold things you did not plan to buy. The most expensive brands sit at eye level. The cheaper ones are on the bottom shelf. None of this is an accident.

The list is your plan. Hold it in your hand. Cross off each item as it goes in the cart. When something not on the list looks good, ask two questions. Do I need this? Is there money for it after the list? If the answer is no, walk past. Look at the bottom shelf, too. That is where the store brands often hide.

One more rule. Do not shop hungry. A hungry shopper buys more snacks. Eat first, then go. Keep a running total in your head or on paper. If milk is $3.00, bread is $2.50, eggs are $2.00 and apples are $4.00, the list so far is $11.50. If the family budget for this trip is $15.00, you know you have $3.50 left.

Picture a Saturday morning. One kid is walking a neighbor’s dog. Another is pulling weeds for a grandparent. A third is selling lemonade on the corner. Each one is earning money. To earn means to get money in return for work. The work comes first. The money comes after.

Kids earn in many ways. Mowing a lawn, raking leaves, shoveling snow, washing a car, watching a younger cousin while a parent is in the next room. Some families pay for extra chores. Some do not, and that is fair too. Regular chores are part of being in a family. Extra work for a neighbor is a job.

A job has rules. Agree on the pay before you start. Show up when you said you would. Finish the whole job, not most of it. Put the tools back. A kid who does all four gets asked back. That is how one lawn turns into three. Always ask a grown-up before you take a job for someone outside the family.

Mateo mows three lawns in one week at $10 each. How much did he earn? 3 times 10 is $30. But he also bought a box of lawn bags for $4 to hold the clippings. The bags were an expense, a cost of doing the job. What he kept is $30 minus $4, or $26.

Keep a record. A record is a written list of what happened. Draw four columns on a page: date, job, money in, money out. Every time you get paid, write it down. Every time you spend on the job, write that too. At the end of the week, add each column. The difference is what you really made.

A record catches mistakes. Without one, kids often think they earned more than they did. "I mowed a lot" feels like $50 but might be $30. And a record shows a neighbor you are serious. A common mistake is writing the pay down only when you feel like it. Write it every single time.

Mateo has a ten-dollar bill in his hand. His friends are going for pizza and a game. It would cost about $8. He could go. He would have fun. But his goal is a $120 bike. A goal is something you decide to work toward. Every ten he spends is a lawn that did not count.

This is the hardest part of money. A want now feels big. A goal later feels far away. Both are real. Nobody has to say no to every small thing. But you have to choose on purpose. Ask: if I spend this, how much longer until my goal? For Mateo, one $8 pizza night is almost one whole lawn.

One trick helps. Look at the picture on the jar before you decide. Another trick is to give yourself a small spending amount each week, and no more. When it is gone, it is gone. Then a pizza night is planned, not stolen from the bike. The goal keeps moving forward.

To save means to keep money instead of spending it, so you can use it later. The simplest tool is a jar. Take a clear jar. Tape a picture of your goal on it. Write the goal amount on the tape: "$120." Put the jar where you will see it every day.

Why a jar and not a pocket? Money in a pocket gets spent. Money in a sock gets forgotten. Money in a clear jar with a picture on it has a job, and you can watch it grow. Every time you put money in, count it and write the new total on a card next to the jar.

Some families use an envelope, a box or a savings account instead. Any of these work. What matters is the same. One place. A picture or a name for the goal. A total you update. The mistake to avoid is "borrowing" from the jar. Once you start taking money out, the jar stops working.

A goal needs a number and a date. Mateo’s bike is $120. He earns about $30 a week from lawns. He decides to save $20 of it each week and keep $10 for spending. How many weeks until the bike? Divide the goal by the weekly savings. 120 divided by 20 is 6. Six weeks.

Now try it another way. If he saves all $30, then 120 divided by 30 is 4 weeks. If he saves only $10, then 120 divided by 10 is 12 weeks. The more you save each week, the sooner you get there. But the plan has to be one you can really keep. A plan you quit is slower than a smaller plan you finish.

Make a chart. Down the side, write the weeks. Next to each week, write the total in the jar. Week 1, $20. Week 2, $40. Week 3, $60. When you can see the finish line, it is easier to keep going. If a week goes wrong and you save less, do not quit. Just add one more week to the chart.

A jar works for $120. It does not work for $1,000. Money in a jar can be lost, stolen or burned in a fire. A bank is a business that keeps money safe. When you put money in, the bank writes it down in your account. An account is the bank’s record of your money.

Putting money in is called a deposit. Taking money out is called a withdrawal. The bank sends a statement, a list of every deposit and withdrawal, so you can check it against your own record. Kids can often open a savings account with a parent or guardian on it. Ask a grown-up at home.

The money in a bank is not sitting in a box with your name on it. The bank keeps careful records instead. That is why the statement matters. Read it. If a number looks wrong, tell a grown-up. And never share your account numbers with anyone outside your family.

Here is something a jar cannot do. A bank pays you for keeping your money there. That payment is called interest. Interest is extra money added to your account because you saved. The bank uses the money you deposit to make loans, and it shares a little of what it earns with you.

Interest is figured as a percent of what you saved. Percent means "out of one hundred." Here is an example with easy numbers. You put $100 in a savings account. The bank pays 2 percent interest for the year. Two percent of $100 is $2. At the end of the year you have $102. You did nothing but leave it alone.

Real interest rates change and are often smaller or larger than this example. The idea is what matters. Saving in a bank makes money grow a little on its own. The longer it sits, the more it earns. The mistake is expecting it to grow fast. Interest is slow and steady. Lawns are faster. Both together are best.

Picture three jars on a shelf. One says spend. One says save. One says share. When money comes in, it gets split three ways before any of it is used. Some for now, some for later, some for others. This is the simplest money plan there is, and many grown-ups still use it.

Try it with a $10 allowance. Put $5 in spend. Put $3 in save. Put $2 in share. That is one way. Another family might do $4, $4 and $2. There is no single right split. The rule is that all three jars get something every time. Spend is for small wants now. Save is for the goal. Share is for helping someone else.

The mistake most kids make is filling spend first and saving what is left. Usually nothing is left. Fill save first, then share, then spend. A person who can split $10 three ways can later split a paycheck three ways. The habit is the whole point.

A budget is a plan for money, written down before you spend it. It has two sides. Money in and money out. Money in is your income, what you earn or receive. Money out is where each dollar goes. The rule is simple. The money out must add up to exactly the money in. Not more.

Here is a weekly example. Income: $10 allowance plus $10 from one lawn is $20. Money out: save $8, share $2, snacks $4, bus fare to the library $3, spending money $3. Add the money out: 8 + 2 + 4 + 3 + 3 = 20. It matches. Every dollar has a job. Nothing is missing and nothing is extra.

At the end of the week, compare the plan to what really happened. If snacks cost $6 instead of $4, something else got $2 less. That is normal. Fix the plan for next week. A budget is not a punishment. It is a map that shows where the money went, so you can steer it where you want.

The share jar is the smallest, but it may matter the most. Sharing means giving part of what you have to help someone else. It can be money. It can be things, like a coat that no longer fits. It can be time, like helping at a food drive. All three are real ways to give.

Many families give to a place of worship, a food pantry, an animal shelter or a neighbor who is having a hard time. Kids can give too. A can of soup for the class food drive. Two dollars from the share jar for a school fundraiser. Sorting cans at a pantry with a grown-up. None of it has to be big.

Give carefully. Ask a grown-up before you give money to anyone, especially online or to a stranger who calls. Real groups will never rush you. Then notice how you feel after you give. Most people feel richer, not poorer. That feeling is why the share jar exists.