Spending Choices

This publication demonstrates that spending choices must be made with limited dollars. Participants must make choices about housing, utilities, furnishings, food, transportation and other variables.
Spending Choices - Articles


Purpose of the Activity

Managing money means making choices. There is never enough money for all the things we want. This activity demonstrates that spending choices must be made with limited dollars. Think about what you must have, such as food, clothing, housing, and transportation, as well as what you would like to have.

How to Use Spending Choices

Step 1

Assume each of you has a 20-bean income. Review all the spending categories using this worksheet and make selections in the categories that meet your needs and wants. Place a bean (or beans) in the box (boxes) of your choice. Instead of beans, you can use your pencil to mark up to 20 boxes. For example, in the housing category shown below, suppose you choose to rent a place of your own. Since this category requires 3 beans or 3 X marks, you would have 17 beans remaining to spend on all other needs and wants.


Step 2

Now suppose your income has been reduced to 14 beans. Decide what you must give up. Where will you cut the 6 beans? If you are not using beans, mark only 14 boxes. Either erase or cross out 6 X marks.

Discussion Questions

What was the first item you gave up? Why?

What was the last item you were willing to give up? Why?

Compare your spending choices to those of other participants. How do personal values, goals, and past experiences affect each person’s choices?

Did you include savings in your spending plan? How much do you think is needed in an emergency reserve account for unexpected expenses?

Tips for Effective Money Talk

Making choices for yourself is easier than making choices with a partner or several family members. When talking with a partner about money, follow these suggestions for greater success in making choices.

  1. Understand your own motivation concerning the use of money. You have the right and the responsibility to be clear about the things that are important to you. Do not expect your partner to guess what these things are. Respect and love grow stronger when two people understand each other’s needs.
  2. Stay calm. Most people get upset and angry when there is a conflict over money. If you are upset, step away until you are calmer, but do not ignore the conflict. Think about what is important to you and ask for time to work through the discussion with your partner.
  3. Control distractions. Do not try to talk while watching television or while other people are around. You will not be very attentive or creative with your ideas.
  4. Listen, listen, listen. Most of us think more about what we are going to say than about what the other person is saying. This leads to lots of mistaken assumptions and lack of focus on what your partner is trying to say. Make sure you check back with a statement such as, “I want to make sure I understand. Is this what you are saying . . . ?”
  5. Recognize each other’s feelings. You may forget about the other person’s feelings in your own eagerness to explain. Remember your partner has feelings just like you. Never put your partner down or belittle his or her ideas whether you are alone or with other people.
  6. Strive to find a win/win situation. After each person has explained what he or she thinks and feels, say, “All right, now how can we work this out so we are both satisfied with the result?”
  7. Establish goals together. Dream, talk, consider, wonder, and suggest a whole variety of goals that are important. Then decide together which ones you want to achieve now and which can wait. Develop a plan to reach your goals.
  8. Talk about the trade-offs for every want and need. Almost everything worthwhile has a price. When two people agree about the costs, the reward is worth it.
  9. Work together to establish a spending plan and make a commitment to keep your spending in line with your plan. With mutual respect and commitment, you and your partner can do wonders.

Adapted for use by Marilyn M. Furry, Ph.D., associate professor of agricultural and extension education, from “The Spending Game,” Cooperative Extension Service, Iowa State University.