Lesson Notes By Weeks and Term v5 - Grade 5

Lesson Video

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Performance objectives

• Define a budget and create a simple personal budget.
• Tell the difference between needs and wants.
• Explain why saving money is important and identify different ways to save.
• Identify the dangers of borrowing from unregulated money lenders or 'mashonisas'.

Lesson summary

This week, we're diving into the responsible use of money. Learning how to manage money effectively is a crucial life skill. In South Africa, where many families face financial challenges, understanding how to budget, save, and spend wisely is more important than ever. This lesson aims to equip you with the foundational skills to make informed financial decisions, now and in the future. You will learn about budgeting, saving, identifying needs versus wants, and recognizing potential scams. This knowledge will empower you to be responsible consumers and contribute positively to your families and communities.

Lesson notes

What is a Budget? A budget is a plan for how you will spend your money. It helps you track where your money is going and ensures you don't spend more than you have. Think of it like a roadmap for your money. It helps you reach your financial goals, whether it's buying a new toy, saving for a school trip, or contributing to your household.

How to Create a Simple Budget: List your income: Income is the money you receive. This could be your pocket money, money you earn from chores, or any other regular source of funds.

List your expenses: Expenses are the things you spend money on. These can be divided into needs and wants.

Calculate the difference: Subtract your total expenses from your total income. If the result is positive, you have a surplus (extra money). If it's negative, you have a deficit (you're spending more than you earn).

Adjust your budget: If you have a deficit, you need to cut down on expenses or find ways to increase your income.

Example: Let's say Thando gets R50 pocket money per week. She spends R20 on sweets, R15 on airtime, and saves the rest.

Income: R50 Expenses: R20 (sweets) + R15 (airtime) = R35 Difference: R50 - R35 = R15 Thando has a surplus of R15 per week that she saves. Needs vs.

Wants: Needs: These are essential for survival and well-being. They include things like food, water, shelter, clothing, and education.

Wants: These are things you would like to have but aren't essential. They include things like sweets, toys, video games, and going to the movies.

Examples in a South African context: Needs: Mealie meal (pap), school uniform, electricity for cooking, transport to school.

Wants: A new soccer ball, a fancy phone, going to a theme park. It's important to prioritize needs over wants, especially when money is limited.

Saving Money: Saving money means putting money aside for future use. It's important because it allows you to achieve your financial goals and provides a safety net for unexpected expenses.

Different Saving Methods: Piggy Bank: A simple and traditional way to save small amounts of money.

Savings Account: A bank account that pays interest on your savings.

Stokvel: A South African savings club where members contribute money regularly and take turns receiving a lump sum. The Dangers of Unregulated Money Lenders ("Mashonisas") and Responsible Borrowing: "Mashonisas" are informal money lenders who often charge very high interest rates. While they may seem helpful in a crisis, borrowing from them can lead to debt traps and financial hardship. Always explore legitimate borrowing options like banks or credit unions.

Responsible Borrowing: Only borrow when you absolutely need to. Understand the interest rates and repayment terms. Make sure you can afford to repay the loan. Avoid borrowing from unregulated lenders.

Example: Zanele wants to buy a new school bag that costs R

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0. She can save R20 per week from her pocket money. Instead of borrowing from a "mashonisa" who charges high interest, she decides to save for 10 weeks to buy the bag. This is a more responsible approach. Guided Practice (With Solutions)

Question 1: Sipho earns R30 per week doing chores. He spends R10 on data and R5 on snacks. Create a simple budget for Sipho and calculate how much he saves each week.

Solution: Income: R30 Expenses: R10 (data) + R5 (snacks) = R15 Savings: R30 - R15 = R15 Sipho saves R15 each week. This demonstrates the basic structure of a budget and how to calculate savings.

Question 2: Identify whether the following items are needs or wants: School shoes A PlayStation game Bread A brand-new bicycle (when you already have a working bicycle)

Solution: School shoes: Need A PlayStation game: Want Bread: Need A brand-new bicycle (when you already have a working bicycle): Want This reinforces the distinction between needs and wants, crucial for responsible spending.

Question 3: Maria wants to buy a dress that costs R

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0. She has R50 saved already. How much more money does she need to save? If she saves R10 per week, how many weeks will it take her to reach her goal?

Solution: Money needed: R150 - R50 = R100 Weeks to save: R100 / R10 = 10 weeks This practical problem requires both subtraction and division, demonstrating the application of budgeting principles.

Question 4: Explain in your own words why it's important to save money. Give one example of something you are currently saving for.

Solution: Saving money is important because it allows you to buy things you want or need in the future, and it provides a safety net for unexpected expenses. For example, I am saving for a trip to uShaka Marine World. This encourages critical thinking about the importance of saving and links it to personal goals. Independent Practice (Questions Only) Nomsa receives R75 per week. She spends R30 on transport to school and R20 on lunch. How much money does she have left to save or spend on wants? List three needs and three wants that you have.