April 24, 2013

A student in third grade may have only about $10 a week to budget, but learning the concept was an important skill for one class Tuesday afternoon.

Mimi Pudenz, project manager at Wells Fargo in Des Moines, taught Sheryl Reiter's students at Fairview Elementary the difference between needs and wants when it comes to making a budget.

"School clothes are needs," Pudenz said. "So are socks and food."

She explained to the students that needs are something that a person couldn't really live without.

Pudenz said wants are things like iPods or going to the movie with friends.

She gave students a worksheet and a $10 budget. According to the budget, each student would usually spend $2 on snacks and $5 on entertainment per week.

Pudenz asked the students questions such as if they didn't spend their entertainment budget for the week, how many weeks would it take them to be able to buy a ticket for a $20 concert?

She also asked if students didn't spend their $2 on snacks, would they have enough money for a movie that cost $6.50?

Pudenz then explained the importance of making trade-offs.

She asked students what would happen if their parents told them they could go either to Adventureland or the zoo this summer, but could choose only one.

Pudenz said by picking only one that was a trade-off. They're trading one for the other.

She also told students they need to be aware that everyone's budget changes as they get older. She said, for example, they might need more for lunch money next year.

Reiter said that understanding budget concepts is part of the Iowa Curriculum Core.

She said students are supposed to learn the difference between a need and a want, how to make a budget and how to set goals.