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Identify "opportunity costs" in the story and in their own lives.

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Create an opportunity costs bar graph as a whole class.

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Complete a table of personal spending and savings information.

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Write an original story about how they spent and saved their allowance and what they gave up or their "opportunity costs" in order to reach their goals.

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a copy of Alexander, Who Used to Be Rich Last Sunday by Judith Viorst in the Teacher Store

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chart paper

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markers

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overhead projector

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transparency

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student handout: How I Spent & Saved My Allowance
To download this document, you need Adobe Acrobat Reader 4.0 or higher. If you do not have this software, it is available for free download.

1. 

Borrow the book Alexander, Who Used to Be Rich Last Sunday by Judith Viorst from your school or local library, or buy a copy from the Teacher Store.

2. 

Write the definition of the term "opportunity cost" on a sheet of chart paper and display for the class:

Opportunity Cost: what you give up when you decide to do or buy something

3. 

Draw a bar graph on a transparency. Write the title "Opportunity Costs for a College Education" across the top. Label the horizontal axis "Opportunity Costs." Label the vertical axis "Number of Students."

4. 

Print out copies of the student handout "How I Spent & Saved My Money" for each student to take home.

Step 1: 

Share with students a story about a time when you did not buy something you really wanted so that you could use or save the money for something more important. For example, maybe you didn't go on a vacation so you could save the money for a car you need to buy. Explain that what you gave up is called an "opportunity cost." Direct students' attention to the definition of "opportunity cost" displayed on the chart paper.

Step 2: 

Ask students to share stories from their own lives in which they gave up something to get something else, or to save for something else that they want more. Have them identify their opportunity costs. Ask students why they think it is hard to save money. Encourage students to share ideas about how to save money. Jot their ideas on chart paper.

Step 3: 

Show students the cover of of Alexander, Who Used to Be Rich Last Sunday. Read the title and author's name aloud. Tell students that this is a story about a little boy named Alexander who receives $1.00 from his grandparents. Instead of saving his money for something he really wants, he ends up spending it on silly things. Explain that Alexander is the youngest of three, and unlike his older brothers, he doesn't understand about saving his money. Ask students if they have younger siblings like Alexander. Or, were they like Alexander when they were younger.

Step 4: 

Read the book aloud. As you read, invite students to keep track of what Alexander spends his money on. To do this, you may want to create a table on the chalkboard. Each time he spends money, students can volunteer to go up to the board to write down what Alexander bought and what it cost. At the end of the story, invite students to add up the cost of each item to see how much he spent. Encourage students to explain whether they think Alexander spent his money wisely.

Step 5: 

Check students' comprehension — especially the economic concept of opportunity cost — by leading a class discussion. Use these guiding questions to prompt the discussion:

Step 6: 

Remind students how in the story Alexander really wants to save up money for a walkie talkie. However, in the end, Alexander is not able to give up other things-opportunity costs-to get what he really wants. Because he has a limited amount of money, he is not able to afford the walkie talkie and all the other things he bought. Ask students to think of something important and valuable that they really want, and that they'd be willing to give up other things for. You may want to point out that saving for college education is something important that their parents do. Because most of us have a limited amount of money, explain that their parents probably give up other things in order to make sure there is money for their college education.

Ask: What would you give up in order to save money to contribute towards your college education? Present the graph titled "Opportunity Costs for a College Education" on an overhead projector. Write students' responses to the question along the bottom of the graph.

Step 7: 

Take a class poll in which students vote for just one of the items listed on the graph that they'd be willing to give up. Create a bar graph using the poll results. Have students analyze the results by asking: What are most students willing to give up in order to save money for their college education? What item are the fewest number of students willing to give up?

Step 8: 

Print out and distribute the student handout "How I Saved & Spent My Allowance" Encourage students to try and save a portion of their allowance to contribute either to their college education fund or to something else they care about. Have them use the table on the handout to jot down all the things they are tempted to buy, or actually do buy with their money. Instruct them to add up how much they spent and how much they saved, and determine whether they saved more or spent more. For an extra challenge, have them figure out what percentage they saved and what percentage they spent.

Finally, instruct students to use the information in their table to write a story like Alexander's, describing how they spent and saved their money. They should be sure to include what they gave up — their opportunity costs — in order to save for their bigger goal.

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thoughtful and significant contribution to class discussions.

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accurate answers to comprehension questions about the story Alexander, Who Was Rich Last Sunday.

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participation in creating the "Opportunity Costs for a College Education" graph.

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ability to identify opportunity costs in the story and in real life.

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a completed table tracking what they spent their allowance on and how much each item cost.

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an original story about how they saved and spent their allowance, and the opportunity costs of saving for their college education.

Dear Alexander...
Students write a friendly letter to Alexander giving him advice on what he can do the next time he has money, so that he doesn't again spend it unwisely. The letter should include tips on how to save, at least some of his money, for something he really cares about.

Do the Math
Students solve the real-life math problems that appear throughout the book. Provide students with play money. Then, re-read the story to them, or have them read the story on their own. Using the play money, have students solve the following problems:

Set Up Shop
Students set up a shop and role play the parts of customer and shopkeeper, making economic decisions along the way. Have them draw pictures or use manipulatives for the items they are selling in the store. Allow them to determine prices and tag each item. Then give all students the opportunity to be a customer and the shopkeeper. Provide customers with a limited amount of play money to spend in the store. They will need to budget their money so that they can afford all they need to buy. Using play money too, the shopkeepers sharpen their math skills as they make change for the customers.

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Did the lesson take the allotted time or should I have given myself more time?

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Did the lesson run smoothly? If no, what happened?

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Were the materials I used appropriate?

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Did the students understand what was being asked of them?

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Did students meet the learning objectives?

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How can I adjust the lesson to make it more effective?