Spending Smarts
About 12 minutes, plus hands-on activity and discussion.
Think about it
When you earn money, you have the opportunity to plant a seed. Over time, that seed can grow into fruit you enjoy. Spending is how we taste and enjoy some of that fruit. But here is the question: which fruit do you eat first? Do you eat it all at once, or do you choose carefully so that you still have enough for later?
Every time you spend, you are making a choice. You are saying “yes” to one thing and “no” to something else. That is why it is so important to think before you spend. Smart spending means enjoying the fruit God provides while still making sure your needs are cared for and your money does not disappear too quickly.
Let’s Learn
Spending Has Limits
When we earn money, the first thing most of us think about is how we want to spend it. Spending is like eating some of the fruit that has already grown. We get to enjoy the reward of our hard work. But just like fruit in a basket, there is only so much. Once the money is spent, it is gone, and the only way to have more is to earn more.
Needs And Wants
There are two types of spending.
Needs are things you must have to live and grow well, like food, clothes, school supplies, and a safe place to live. Grown-ups often call this necessary spending because it is required for life.
Wants are things that are fun to have, but you can live without them, like toys, desserts, or the newest video game. Grown-ups call this discretionary spending because it is spending you choose, not something you must do.
Smart spending means taking care of your needs first, then choosing wants wisely. Needs are like the fruit that keeps you strong, while wants are the fruit that tastes extra sweet. Both are good, but they are not the same. These simple words—needs and wants—are the ones you will use now. As you get older, you will also hear and use the words necessary and discretionary to describe spending.
Spending Always Has Trade-Offs
Every time you spend on one thing, you are saying no to something else. If you spend your money on snacks today, you may not have enough for the book you wanted tomorrow. If you use your money for new earbuds, you may not have enough left to go to the movies. Trade-offs are part of every spending decision, and it is important to remember that every dollar you spend was a dollar you worked to earn. Just like every piece of fruit you eat came from a seed that was planted, every bit of money you spend came from effort you put in.
Lasting Value Matters
Some things last longer and give you value for days, weeks, or even months. A warm coat or a soccer ball can be useful for a long time. Other things only last a few minutes or hours, like a drink, snack, or movie. Both can be fun, but wise spending means thinking about what will bring the most value. For example, an older kid may choose between buying a $15 fast-food meal that is gone in one lunch or spending that same $15 at the grocery store on food that will last six lunches.
It is good to spend money on both quick fun and lasting value, but remember that you worked hard for your money. Be sure to think about the value before you spend.
Wants Aren’t Bad
It is not wrong to spend money on things you enjoy. God gave us good things to enjoy, and spending on fun items is part of life. The key is balance. If you buy this want, you may not have enough money left for that need. Spending wisely means enjoying some fun while still keeping your important needs covered.
Be Careful with Impulse Spending
Sometimes we see something and feel like we must buy it right away. That is called impulse spending.
Imagine a kid at the store with his parents. He was not planning to spend money that day, but when he saw some shiny sports cards, he really wanted them. The cards cost $30, and he had $35 with him, so he went ahead and bought them. Later, he regretted his choice. The cards were not worth $30 to him, and with only $5 left, he realized he could not buy something else he would have enjoyed more. So he made a wise choice. He went back to the store with his parents, returned the cards, and got his money back. He learned that impulse spending can lead to regret, but smart choices can fix mistakes and guide better decisions in the future.
Spending Shows What We Value
What we choose to spend money on shows what is important to us. Imagine a kid goes to a friend’s house and notices they have shelves filled with books. That family clearly values reading, and they spend a lot of their money on books. Another family might have a garage full of sports equipment because playing sports is very important to them. Spending shows what matters most to us, and it shapes how others see our priorities too.
A Note For Parents and Kids
Parents provide most of a child’s basic needs like food, clothing, shelter, and school supplies. As teens get older, taking on some of their own expenses, like gas, a phone bill, or clothing choices, helps build responsibility and independence. This gradual shift teaches responsibility and prepares them for adulthood.
A Parable of Jesus: The Prodigal Son
Jesus told a story about a young man who learned a hard money lesson. The story is described below, but you can read it in full in the Bible in the book of Luke 15:11–32.
There was a father with two sons. One day, the younger son said, “Dad, give me my share of the family money now.” His father agreed, and the son left home with his inheritance.
The son began spending money on whatever he wanted: parties, fancy clothes, new things, and friends who only liked him when he was spending his money. He did not think about his needs.
Before long, the money was gone. Hard times came, and the son did not even have enough to buy food. He became so hungry he was happy to eat food meant for pigs! Finally, he realized he had made a mistake. He decided to go back home to his father, who welcomed him with love.
This parable teaches us that if we spend everything on wants, we may not have enough left for what we truly need. The story also reminds us that when we make mistakes, God still loves us dearly!
The Payday Path
Don’t forget, the Payday Path includes a spending basket. Each week, some of your payment can be added here, giving you the chance for your spending basket to grow as you think about the things you need and want to buy.
Words to Know
Needs are things you must have to live and grow, such as food, clothing, and shelter.
Wants are things that are fun to have, but you can live without them, such as toys, snacks, or games.
Necessary spending is the grown-up way of describing money that is used to pay for needs.
Discretionary spending is the grown-up way of describing money that is used to pay for wants, or money you get to choose how to spend.
Let’s Play!
Drag and Drop
Instructions: Is it a need or a want? Drag the words into the correct category.
Bible Time
“The wise have wealth and luxury, but fools spend whatever they get.”
—Proverbs 21:20
This verse reminds us that wise people think carefully before they spend. They save some of what they have and make sure their needs are met first. Foolish people spend everything right away without thinking, and then nothing is left. Spending wisely is like enjoying fruit from your basket but leaving enough for later. God wants us to enjoy the gifts He provides, but He also wants us to be careful and thankful, not wasteful.
With Your Grown-up
If a grown-up or parent is nearby, spend a minute to discuss one or more of these topics.
Hands On
Put learning into action! Download one or both of the activities and dive into a fun, practical way to explore today’s lesson.
What we Learned
Today we learned that smart spending means knowing the difference between needs and wants, and remembering that every dollar we spend was first earned. Needs, or necessary spending, are the things we must have to live and grow, while wants, or discretionary spending, are the fun extras we can choose. We also learned that spending has limits and trade-offs. Choosing one thing means saying no to something else, so it is wise to think about what brings the most value. Spending shows what we care about most, and when we make careful choices, we enjoy the fruit of our work in a way that lasts.
Check Your Understanding
High-Five!
Hit play for your end-of-lesson video!