Thinking About Money and Goals (9-12)

9, 10, 11, 12

Students will broaden their understanding of setting personal and financial goals, and positive and negative incentives related to financial decisions, especially investing and donating. They will determine how goal setting influences economic decision-making.


Lesson Rating 
PrintTwo 45 Minute Class Periods

The learner will:

  • participate in discussions about goals and the use of money.
  • define incentives, and describe positive and negative incentives.
  • give examples of short, medium, and long term goals.
  • explore how their choices can affect their own well being and that of the community.
  • identify the benefits of setting goals and committing to them.
  • The National Endowment for Financial Education® (NEFE®): a non-profit 501 (c) (3) foundation dedicated to helping all Americans acquire the information and gain the skills necessary to take control of their personal finances.
  • National Council on Economic Education, Classroom tested, internet- based economic lesson materials for K-12 teachers and students,
  • National Council on Economic Education, The Northwestern Mutual Foundation, The Mint, Personal Financial Literacy website, 1997,


  1. Day One:

    Anticipatory Set: Write “impulse spending” on the board or chart paper. Take a quick survey of those who have ever purchased something “on impulse” when they probably shouldn’t have done so, given their financial situation at the time.Write “buyers remorse” on the board or chart paper. Ask students if anyone can define the term. ("Buyers remorse” is regretting a purchase after the fact.) Ask for volunteers to share an example of when they may have experienced “impulse spending” or “buyer’s remorse.” Pose these questions:

    What benefits did you see when you made the decision to spend?What costs (monetary and other) were perceived?

    The perceived benefits and costs that we consider when making any economic decision are called incentives? Having more desirable goods and services is a powerful positive incentive to motivate people to spend, sometimes impulsively.

  2. Introduce the economic concept of incentives by writing the word on a display area. Tell students that incentives are positive (benefits) or negative (costs) factors that motivate or influence people. Understanding what incentives are at work in any potential decision can help a person make a better decision.

  3. Positive incentives are rewards that motivate you to do something. They can be monetary, or they could be psychological, emotional or moral rewards, or could involve time saved, etc.

  4. Negative incentives (also called disincentives) are like penalties that motivate or persuade you to not do something. They could be monetary, such as a fine or loss of profit, or they could be non-monetary, such as a threat of punishment or shame, etc.

  5. In a display area, show the following chart:


    Positive (+)


    Negative (-) or Disincentives


  7. Brainstorm with students some positive and negative incentives in the classroom (grades, rules, rewards, punishments, peer pressure, etc.), school at large (graduating, scholarships, awards, etc), family, or everyday life in the community (positive and negative incentives relating to money, consumption of goods and services, obeying laws, etc.)

  8. After building lists, suggest that incentives, both positive and negative, are important forces that influence the way people behave. In fact, a core principle of economics is that people do respond predictably to incentives. If incentives are changed, behavior predictably changes. Since most people want to maximize their benefits, they look for more ways to be rewarded.

  9. Ask the following questions as appropriate for your class:

  10. What are some positive incentives (benefits) for saving/investing? (buying special gifts, expensive items, having money for emergencies, college, retirement, earning interest higher than inflation, having someone possibly match your savings, growing wealth through compounding of interest over time, sense of security, etc.)

  11. What are some negative incentives (disincentives or costs) for saving/investing? (can’t spend now for consumption of goods and services, can’t enjoy benefits of a good or service now)

  12. What is a positive incentive for investing some of the money you save? (to make more money than by just saving it at no, or low interest)

  13. What are some incentives that motivate people to be or not be philanthropic? (Positive: feel good, sense of belonging, the right thing to do, fun, sense of purpose, giving back, important to the family, etc. Negative: costs money, time or effort, etc.)

  14. Debrief Day One by asking:

  15. Can the knowledge of incentives at work in a given situation help explain or predict people’s behavior? (If a person can recognize incentives, negative and positive, they are in a better position to make informed economic decisions.)

  16. Has anyone already started investing? If so, how? If so, why?

  17. Why don’t more young people start saving and investing sooner “if time is so much on their side”? (incentives to spend are so strong)

  18. What are some positive and/or negative incentives influencing you regarding our upcoming choice of helping a charity/nonprofit organization?

  19. Optional Day One Lesson Extensions:

  20. Invite a bank or financial institution representative to bring brochures, pamphlets, and flyers about saving and investing. Compare interest rates during the presentation and incentives relating to different savings plans.

  21. Print out a graph of the history of the Dow Jones Industrial Average and discuss the highs and lows over history and the general trend over time. Is this a positive incentive for investing in stocks over the long term?

  22. Invite a local stockbroker to class to address the topic of how to be a smart investor for money that will grow on its own. Prepare class questions in advance that cover beginning strategies, diversification, and long-term strategies. Focus on what students can do to get started.

  23. Day Two

    Anticipatory Set: Write the word “goals” on a display area. Ask students to recall prior knowledge of incentives in the Day One lesson and ask: “What do goals and incentives have in common?” (Goals act as incentives that help us achieve something in the future like buying the goods and services we want the most, or donating to a charity, or saving/investing for other things we want.) Ask the students if they or their families have any goals.

  24. Ask students to list some benefits of sticking with and achieving ones saving and investing goals. (getting more of the goods and services you want eventually, personal satisfaction for achieving what you set out to do). Relate this to the class fund-raising (saving) project.

  25. Ask students if they can identify the opportunity cost of setting a goal. (giving up the next-best alternative of not having a goal)

  26. Explain that saving goals can be short-term, medium-term, or long-term depending on what you are saving for and how much is saved each week, month, or year.

  27. Short-term saving goals are for something people plan to buy soon, usually in less than a year. Medium-term goals are usually set for between one and three years, such as saving to buy a used car.Long-term goals, like saving for college, a home, or retirement, for more than three years are called long-term goals.

  28. Hand out Handout One: The Goal Setting Process. Read and discuss the steps together. Discuss a personal example or ask for a student example of the goal setting process leading to achievement of a goal.

  29. Hand out Handout Two: Saving and Investing Goals. Explain that eventually achieving any goal, financial or otherwise, requires some focus and effort.

  30. Model possible answers for the chart by asking for student volunteers to share a short, medium, and long term saving/investment goal. For each goal, ask the student to provide source(s) of income for that goal and to determine what their opportunity cost would be for saving/investing money for that goal. Write each goal, income source, and opportunity cost on the display area to model how the chart should be completed.

  31. Give the students 5-10 minutes to complete the Saving and Investing Goals chart.They may be asked to share their charts with others in pairs or small groups prior to debriefing this activity.

  32. For debriefing the following questions may be asked:

  33. Is it a good idea to set financial or other goals? Why? What are the benefits and costs? (gives us incentives to set reachable targets, life is usually better for people who have definite goals, we get more of what we want, make better decisions with money, our own values and priorities are brought to life with a goal. The chances of winning the lottery are really quite small indeed for those with no goals at all, but only the hope of winning big.)

  34. What is the opportunity cost of saving? (giving up the opportunity to spend or donate now)

  35. How does a wish differ from a goal? (a wish is a hope; a goal focuses a person and often has a plan of action to achieve it. Without a plan of action, goals are just talk. Every choice involves a cost of some kind. Goals require costs of scarce time, energy, talents, money, etc. to achieve. “There is no such thing as a free lunch.”)

  36. How do you decide what your saving and investing goals are? (answers will vary, but good to start with determining what is important to you for the future, learn more about the topic, start small and set reasonable goals, keep learning.)

  37. Is it acceptable to take risks with money goals? If so, when? When would it be harmful to take risks? (yes, but balance and diversification is needed, more risk can be tolerated for long term investment goals than for short term goals where there is usually less tolerance for risk in exchange for lower rates of return. Taking risks in life and failing at goals beats the alternative of doing nothing)

  38. For what particular goals does investing (to earn a financial return) make the most sense? (long term goals such as college, buying a home or other property, retirement)

  39. Hand out Handout Three: Personal Reflection on Goals and give students a choice to write, either in class or as a homework assignment, on one of the topic. Adjust rubric to suit needs of the class.

  40. Conclude the lesson by reminding students that in the next lesson we will be applying a very useful decision making model to select a nonprofit for the class donations. The best possible class goal will be set that reflects what is important to the class. Explain that a clearly defined goal for the class has a better chance of being achieved, especially if the goal setting process is followed.


Teacher observation of student participation during class discussions

Analysis of responses to goals chart and/or written assignment

Philanthropy Framework

  1. Strand PHIL.II Philanthropy and Civil Society
    1. Standard PCS 03. Philanthropy and Economics
      1. Benchmark MS.2 Explain charitable giving in economic terms.
      2. Benchmark MS.3 Give examples of <i>opportunity cost</i> related to philanthropic giving by individuals and corporations.