F. Financial Literacy · Money and Finances: Paying, Saving and Smart Choices

Earning, Spending, Saving, Investing and Donating

F1.3 A1About 40 minutes

Learning goals

I can explain what earning, spending, saving, investing and donating mean.
I can sort money choices into these five groups.
I can name key questions to ask before making each kind of money choice.
I can split an amount of money into spending, saving and donating.

Words to know

earning
Getting money in return for work.

income
The money a person earns or receives.

spending
Using money to buy goods or services.

saving
Keeping money aside to use later.

investing
Putting money somewhere so that it can grow over time.

interest
Extra money a bank pays you for keeping your savings there (or that you pay when you borrow).

risk
The chance that you could lose some money.

donating
Giving money, things or time to help other people, animals or the community.

charity
A group that collects donations to help others.

Let's start with a story

In the fall, Amira rakes leaves for her neighbour, Mr. Okafor, and he pays her $20. Amira is thrilled. Now she has a choice to make. Should she buy a new book right away? Keep the money for something bigger? Give some to the animal shelter where she got her cat?

Every time you have money, you can do five main things with it: earn it, spend it, save it, invest it or donate it.

The five money words

Earning means getting money for doing work. Grown-ups earn money at their jobs. Kids might earn a little by helping a neighbour or selling crafts they made, with a grown-up's OK.
Spending means using money to buy goods or services.
Saving means keeping money aside to use later, often for a goal, like a new bike. You might save in a piggy bank or in a bank account.
Investing means putting money into something so it can grow over time. For example, grown-ups invest by buying a tiny part of a company, called a share. Some investments can grow a lot, but they can also go down in value. That is called risk. (Savings in a bank account can grow a little, too, because the bank pays interest, a little extra money. But that money is still savings: it grows slowly, and it is kept safe for later.)
Donating means giving money, things or time to help others, like giving to the food bank, a school fundraiser or a charity.

Money comes in when you earn it. Then you choose: spend it, save it, invest it or donate it.

Money choice	Key questions to ask
Earning	What work can I do? Is it safe and allowed for my age? How much time will it take? Will I still have time for school, rest and fun?
Spending	Do I need it or just want it? Do I have enough money? Is it a good price? Will I still use it next month?
Saving	What is my goal? How much do I need? How long will it take? Where will I keep my money safe?
Investing	How long can I leave the money alone? How much can it grow? What is the risk of losing some? Who can help me decide? (Kids always decide this with a trusted grown-up.)
Donating	What cause matters to me? How much can I give? Is the group trustworthy? Could I give time or things instead of money?

Key factors to think about before each money choice.

Worked example

Example 1: Sort the choices

Sort each choice: earning, spending, saving, investing or donating.

Theo walks his neighbour's dog and gets $10.
He buys a $6 movie ticket.
He puts $3 in his piggy bank for a new skateboard.
With his grandma's help, he puts $5 of birthday money into an investment that she hopes will grow over time.
He brings $2 to the school food drive.

1. Theo did work and got paid: earning.
2. He traded money for a service (a movie): spending.
3. He kept money for later: saving.
4. He put money somewhere so it can grow over time, with some risk: investing.
5. He gave money to help others: donating.

Earning, spending, saving, investing, donating.

Worked example

Example 2: Split the money

Amira earned $20. She decides to save half, donate $2, and spend the rest. How much will she spend?

Half of $20 is $10. That goes to saving.
She donates $2.
Money used so far: $10 + $2 = $12.
Left to spend: $20 − $12 = $8.
Check: $8 + $10 + $2 = $20. ✔

Amira spends $8, saves $10 and donates $2.

Amira's money in three jars: Spend $8, Save $10, Donate $2.

Worked example

Example 3: Think it through

Noah earned $30 selling cards he made at a school craft sale. He wants an art set for $25. He also wants to donate to the animal shelter. What questions should he ask?

Spending: Do I need the art set or just want it? (A want, but he would use it a lot.) Is $25 a good price?
If he spends $25, he has $30 − $25 = $5 left. He could donate some or all of the $5.
Saving: Could he wait, save more, and do both later?
Donating: Could he give time instead, like helping at a shelter event with a grown-up?
There is more than one good plan. What matters is that Noah thinks before he decides.

Noah asks: need or want? enough money? good price? what matters to me? Then he makes a plan he feels good about.

There's no single right answer

Different people make different choices with their money, and that's OK. A good money decision is one you thought about, using the key questions.

A funny-but-true fact

Long ago on the island of Yap, in the Pacific Ocean, people used giant round stones as money. Some were taller than a grown-up! Imagine trying to fit one of those in your piggy bank.

Hands-on activity

Make three money jars

You need: three clean jars or containers (plastic is safest), paper, tape, markers, and some play coins or real coins.

Label the jars Spend, Save and Donate (or Share).
On the Save jar, write a goal and how much it costs.
Pretend you earned $20 (use play money or paper slips). Decide how much goes in each jar. Write a number sentence, like $8 + $10 + $2 = $20.
Explain your choices to a grown-up using the key questions.
Try again with $30 and with $50. Did your plan change?

Grown-up note: if you use glass jars, handle them yourself. Grown-up note: coins are a choking hazard. Keep them away from babies and toddlers, and put them away after playing.

Your turn

Liam gives $5 to a community food drive. Which money word is this?

Sara buys a $8 skating pass. Which money word is this?

Ben gets $10 for helping a neighbour carry firewood. Which money word is this?

Kim puts $4 a week in a jar for a new bike. Which money word is this?

A bank pays Jess $1 of interest on her savings. What does this show about investing?

Name one key question to ask before donating.

Owen has $30. He saves half and donates $5. How much is left to spend?

More practice: warm-up

Getting money for doing work is called ____.

Giving money or time to help others is called ____.

Keeping money to use later is called ____.

Using money to buy something is called ____.

Putting money somewhere so it can grow over time is called ____.

More practice: on your own

Zara earns $12 a week for helping at her family's store. How much does she earn in 4 weeks?

Theo has $40. He saves $20, donates $4 and spends the rest. How much does he spend?

Why might a bank account be a better place to save than a sock under the bed? Give two reasons.

Give two key questions to ask before spending.

Jas's aunt invests in shares of a company. What could happen to the value of her shares?

Challenge

Mila saves $10 each week. How many weeks until she has $60 for new skates?

Ty has $50. He donates $5. Then he wants to save twice as much as he spends. How much does he save and how much does he spend?

Kai and Ava are both 9. Kai earns money shovelling snow. Ava says she can't. Give a reason the same way of earning might work for one person but not another.

Check your understanding

Quiz

Ari rakes leaves and gets $10. What is this?

Putting money aside for a goal is called…

What does donating mean?

Which sentence about investing is true?

Mo has $25. He saves $10 and donates $5. How much can he spend?

Which is a key question to ask before spending?

For parents and teachers

What your child is learning: the Ontario curriculum (F1.3) asks Grade 4 students to explain the concepts of spending, saving, earning, investing and donating, and to identify key factors to consider when making basic decisions about each. Investing is introduced only as an idea: money can be put into things like shares so it can grow over time, and investments carry risk. Interest on a savings account is mentioned as a small, safe way savings grow. The lesson also builds decision-making and self-awareness (A1).

Common difficulties:

Mixing up saving and investing. Saving is keeping money for later; investing is putting money where it can grow. Interest on a savings account is a simple bridge between the two.
Thinking donating only means money. Remind your child that giving time or items also counts.
Splitting money and forgetting to check. Encourage adding the parts back up to the total.

How to help: Talk about your own choices in simple terms: "We're saving for our summer trip," or "We donated to the food bank this month." If your child gets money for birthdays or helping out, try a spend/save/donate split and let them choose the cause. Respect your family's own values: different families make different choices, and the lesson stresses that there is no single right answer.