Money and Me

You Decide

We all have a limited amount of money that we can use to buy things we need or want. We call this scarcity. Sure, it would be nice to have whatever we want whenever we want it, but because our money is scarce, we have to make choices about how to earn, spend, and save it.

When you make a choice, you give up one thing-your cost-in exchange for another thing that you want or need-your benefit. For example, when you go to the movies, you choose whether to see a scary movie or a funny one. If you choose the scary movie, you give up the opportunity to see the funny one.

As you read on, you'll discover that making choices is all about weighing the costs and benefits of each decision.

Ask an adult: Did you have to make a choice today? How did you decide which choice to make?

Source: Federal Reserve Bank of Cleveland

Money and Me

You Decide

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