The big ideaSpending less than you earn leaves a gap, and the gap grows every month.
How it works
Means are the coins that come in each month. Nia, Obi and Pax each earned ten.
Spending less than you earn leaves a gap. A small gap grows a little every month.
Spending over your means has to come from savings or a loan. Owing is ordinary, and nobody is bad for it.
Living below your means is not being stingy. Treats are fine, because you choose what matters most.
Spending of the three neighbors, out of ten coins earned.A gap and a cushion.
Example 1: Nia's gap
Nia earns 10 and spends 8.
10 − 8 = 2.
Her gap is 2 coins a month.
Example 2: Six months
Nia saves 2 a month.
6 × 2 = 12.
After six months she has 12 coins. Pax owes 12, and Obi has nothing.
Example 3: A broken tap
A tap repair costs 4 coins.
Nia's gap in a year is 24 coins.
24 ÷ 4 = 6, enough for six broken taps.
Example 4: After a raise
Everyone's pay goes up to 12.
Obi spends all 12, so his gap stays 12 − 12 = 0.
Nia keeps spending 8, so her gap is 12 − 8 = 4.
Words to know
means
The coins that come in each month.
gap
What is left between what comes in and what goes out.
cushion
A gap saved up so a surprise is a bump, not a fall.
Watch out
Spending everything you earn leaves no gap at all.
Extra spending is not free. The coins come from savings or a loan.
Living below your means does not mean never buying anything.
Nobody is bad for owing coins. A gap just points the other way.
Try it
You earn 10 and spend 7. What is your gap?
Pax earns 10 and spends 12. Where do the extra 2 coins come from?
Nia saves 2 coins a month. How many after six months?
Is living below your means the same as never buying treats?
Answers: 1. 3 · 2. Savings or a loan · 3. 12 · 4. No
Try at homeAsk a grown-up how their family decides what to spend and what to keep, and what treats they still enjoy.
For grown-upsAsk a grown-up how your family decides what to spend and what to keep, and what treats they still enjoy. Keep it a calm talk about choices, not about your own family's money.
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