By Fatskills Exam Guides Team — the exam nerds behind 28,500+ quizzes and 2.1M practice questions across 500+ global exams.
By the end of this topic, students will be able to:
Spending and saving are two important ways to use money. Spending is when we use our money to buy things we need or want. Saving is when we put our money aside for later use, such as for a special treat or a big purchase.
Imagine you have £10 in your pocket. You might spend it on a toy or a snack, but you could also save it for a new book or a fun activity. Saving is like planting a seed in the ground, it will grow and be worth more later.
Needs and wants are two important concepts to understand when making choices about how to use our money. Needs are things we must have to survive, such as food, water, and a warm place to live. Wants are things we would like to have, but we don't need them to survive, such as a toy or a game.
When making choices about how to use our money, we should consider what we need and what we want. We should also think about how much money we have and how much things cost.
Let's say you have £5 to spend on a treat. You see a toy that costs £3 and a book that costs £2. You also see a snack that costs £1. Which one should you buy?
To make this decision, you need to think about what you need and what you want. Do you need a toy or a book? Or do you want a snack? You should also think about how much money you have and how much things cost. In this case, you have £5 and the toy costs £3, the book costs £2, and the snack costs £1.
If you buy the toy, you will have £2 left over. If you buy the book, you will have £3 left over. If you buy the snack, you will have £4 left over. Which one do you think you should buy?
Some students might think that spending is always bad and saving is always good. However, spending can be a good thing if we are buying something we need or something that will make us happy.
For example, if you need a new pair of shoes because your old ones are worn out, spending money on a new pair is a good idea. On the other hand, if you spend all your money on toys and treats and don't save any, you might not have enough money for something important later.
When answering questions about spending and saving, remember to think about needs and wants. Also, make sure to consider how much money you have and how much things cost.
When making choices about how to use your money, think about what you need and what you want. You should also think about how much money you have and how much things cost.
What is the difference between spending and saving? A) Spending is when we use our money to buy things we need, and saving is when we use our money to buy things we want. B) Spending is when we use our money to buy things we want, and saving is when we use our money to buy things we need. C) Spending is when we use our money to buy things we need or want, and saving is when we put our money aside for later use. D) Spending is when we use our money to buy things we need, and saving is when we use our money to buy things we want.
Correct answer: C) Spending is when we use our money to buy things we need or want, and saving is when we put our money aside for later use.
Why the distractors fail: A) This answer incorrectly states that spending is only for needs and saving is only for wants. B) This answer incorrectly states that spending is only for wants and saving is only for needs. D) This answer incorrectly states that spending is only for needs and saving is only for wants.
What are needs and wants? A) Needs are things we must have to survive, and wants are things we would like to have but don't need to survive. B) Needs are things we would like to have but don't need to survive, and wants are things we must have to survive. C) Needs and wants are the same thing. D) Needs and wants are different things, but we can't tell which is which.
Correct answer: A) Needs are things we must have to survive, and wants are things we would like to have but don't need to survive.
Why the distractors fail: B) This answer incorrectly states that needs are things we would like to have but don't need to survive. C) This answer incorrectly states that needs and wants are the same thing. D) This answer incorrectly states that needs and wants are different things, but we can't tell which is which.
What is the benefit of saving money? A) We can spend it all on treats. B) We can use it to buy things we need or want later. C) We can give it to our friends. D) We can throw it away.
Correct answer: B) We can use it to buy things we need or want later.
Why the distractors fail: A) This answer incorrectly states that saving money is a bad thing. C) This answer incorrectly states that saving money is for giving to friends. D) This answer incorrectly states that saving money is for throwing it away.
What should we consider when making choices about how to use our money? A) Only what we want. B) Only what we need. C) What we need and what we want, and how much money we have and how much things cost. D) None of the above.
Correct answer: C) What we need and what we want, and how much money we have and how much things cost.
Why the distractors fail: A) This answer incorrectly states that we should only consider what we want. B) This answer incorrectly states that we should only consider what we need. D) This answer incorrectly states that none of the above is correct.
What is a budget? A) A plan for how to spend all our money. B) A plan for how to save all our money. C) A plan for how to use our money to buy things we need and want. D) A plan for how to give all our money to our friends.
Correct answer: C) A plan for how to use our money to buy things we need and want.
Why the distractors fail: A) This answer incorrectly states that a budget is for spending all our money. B) This answer incorrectly states that a budget is for saving all our money. D) This answer incorrectly states that a budget is for giving all our money to our friends.
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