Key Ideas of Financial Literacy

If you had 5 dollars, would you spend it all on candy today, or save some for a toy next month? That one little choice is exactly what grown-ups think about with their money every single day!

- The difference between 'want' and 'need' - What it means to save money instead of spending it right away - Why people earn money by working - How a piggy bank helps you reach a savings goal

A need is something you must have to stay healthy and safe, like food, water, and a place to sleep. A want is something fun to have but you could live without it, like a video game or a new toy. Grown-ups have to pay for needs first, like groceries and rent, before they spend money on wants.

Money doesn't just appear -- most grown-ups earn it by working a job, like teaching, building houses, or driving a bus. Some kids earn money too, by doing extra chores or helping a neighbor. Earning money means trading your time and effort for it.

Saving means keeping some money instead of spending all of it right away. If a toy costs 10 dollars and you only have 3 dollars, you can save a little bit each week until you have enough. This takes patience, but it means you get exactly what you really want.

Spending is using your money to buy something. Smart spending means thinking before you buy: Do I need this? Do I want something else more? Sometimes it's smarter to wait and save for a bigger want instead of spending on lots of little things.