Online Economic Resources for Kids
Economics is not simply about money. It's about the way businesses work, such as the amount of money a lemonade stand makes. It's also about stocks, bonds, taxes, and allowances. Economics is a major part of nearly everything that we do. Economics is also about learning good financial habits and understanding how money works in the world. It's important to learn good money handling skills and how to use it responsibility.
Making a Budget
Budgets are a way to keep track of exactly how much money is coming in and going out. Businesses are not the only things that have to keep a budget. Families must also keep budgets to make sure that they have enough money to pay bills, buy groceries and other products they may need, and pay for services, such as car repairs. Whether you own a company or get an allowance, you want to know how much money you have at all times. You want to make sure you don't run out of money, in case you may need it for something important later on. You also don't want to assume that you have more money than you actually have, or you could come up short when you pay for something.
Importance of Trade
Trade is the trading of one thing for another, and is an important part of a successful civilization. A good can be traded for another good, for money, a service, or an exchange of nearly anything. Usually, people will trade things that they have too much of for something they do not have enough of. For example, a farmer may trade fresh vegetables or grains for money to buy farm equipment. Countries and people must trade because they are not able to produce all the things they need themselves for survival. Trade keeps the population running smoothly.
Changes in Money
Many people think of dollar bills, quarters, and other coins when they think of money. Money doesn't have to be just American currency; it can be anything people want it to be. Before paper money or coins were created, people would exchange â€“ or trade â€“ stone tools, fish, leather, wood, or other things. The method of exchanging one thing for another is known as bartering. Bartering is still used today. For example, Jim might agree to fix Susan's computer in exchange for doing Jim's income tax. The difference between money and bartering is the situation. Money can be used in nearly any situation, while bartering must include an exchange that both people agree upon.
What Banks Do
Banks are places where money changes hands. They also offer many other services, such as loans, savings, and checking accounts. Banks can give and take money from individuals and businesses. Savings accounts allow customers to deposit their own money into the account and can leave it there until they need the money again. Most banks offer interest on savings accounts, which is a percentage of the sum of the account that adds up over time. A checking account is typically used to take money out of the account. People and businesses can use checking accounts to write checks or pay bills. Checks can be hand-delivered or mailed. Being able to hold money for an extended period of time allows a bank to ensure money flow.
The Business Cycle
Businesses go through cycles in which the economy is at a high, or at a low. When at a low, the term used is recession. American economies often go through four general stages, including expansion, peak, contraction, and trough. Expansion is a period in the business cycle in which more money is coming into the economy and businesses have more money to buy more things. A peak happens when the country's expansion is at its highest point. A contraction is the opposite as it occurs when production goes down; people have less money, and hiring goes down. A trough is the lowest point in an economy before production begins to climb again. Here are some great resources to utilize!
Online Economics Games
- Rags to Riches
- Recycle City Dumptown Game
- Peanuts & Crackerjacks
- Economy Hoops
- Activities from the Ministry of Consumer Affairs
- The Prisoners' Dilemma
- H.I.P. Pocket Change
Great Economics Sites for Kids
- Sense & Dollars
- An Outline of the U.S. Economy
- Goods & Services
- Economics Presentations and Videos
- Investing for Kids
- Economics Interactive Tutorials
- Be Money Smart
Resources for Parents and Teachers
- Middle School Economic Lessons
- What's the Economy for, Anyway?
- Made in the U.S.A.
- Thematic Teaching Entrepreneurship
- Explorations in Economic Demand
- The Productive Blues (Jeans)
- Products Across Borders