PSHE and Citizenship• Statement 1 Lorem ipsum dolor sit amet, consectetur adipiscing elit.
• Statement 2
• Sub statement
Success Criteria
Explain some financial risks we might encounter and can discuss how we can avoid them.
• I can explain what a financial risk is.
• I can give some examples of financial risks.
• I can discuss ways we can avoid them.
This resource is fully in line with the Learning Outcomes and Core Themes outlined in the PSHE Association.
Reconnecting
What Is Financial Risk? Let’s think about what these words actually mean. In your small groups, can you choose and define any of these words?
profit investment
financial riskbankrupt
Can you share the definition you used?
Working in your groups, now match the Money Vocabulary Matching Cards in the pack on your table. (We won’t do this for home learning! Just go to the next page for the answers!)
What Is Financial Risk? The sum of money that is gained. If you buy something for £1, and sell it for £2, you have made a profit of £1.
This is a sum of money put into an account or used to buy a product, with the hope that the value will grow over time. This would mean that the money invested could later be withdrawn having gained a profit.
This is a term used to describe money and monetary dealings.
A situation where there is exposure to danger.
When a person or company is unable to pay any money that they owe. Their assets will then be taken control of by another organisation and things they own can be sold to pay their debts.
An increase in price.
The amount something is worth.
Profit
Investment
Financial
Risk
Bankrupt
Inflation
Gain
Value
Exploring
Where Can We Keep Our Money?
We already know that money can come from lots of different sources. So…. where can we keep our money safe?
wallet
investment
Look at the four ways above, showing ways we can keep our money safe. Working with your partner, read the scenario cards you have been given. Which way above do you think best reflects the way you should keep your money safe?
Now you have decided on the way you will keep your money safe, are there any risks associated with this? Could anything happen to your money there?
How can we avoid this?
wallet
Where Can We Keep Our Money?
When discussing in your groups, what did you decide were the financial risks (if any) of your chosen way of looking after your money?
It is sensible to keep large amounts of money in a bank or savings account. Although there is some financial risk with this, it is very minimal if we choose the account sensibly.
wallet money box
bank account investment
Everyone is probably quite familiar with the first three ways of looking after their money – you have probably all heard of a wallet, a piggy bank or other type of storage container for money along with a bank account.
But the term investment might be new to you.
When we invest our money, it means we spend it on something in the hope that it will make us more money over time.
You can invest money by buying raw materials to make into something to sell, by buying something that we can sell for more money later, or by saving money so it grows into a larger sum of money.
Some investments can be over a short time, while others can be over a long time.
Quite a popular thing to do if you have a lot of money to invest, is to buy a flat or a house, then years later, sell it for more money than you bought it for.
Optional: Play a Game about Financial Risk
Read the instructions carefully!
What Can Financial Risk Look Like?
Investing money can be a financial risk, as you can never be sure if you will be able to make more money or even whether you will be able to get the money back that you have spent.
Let’s imagine we have a small amount of money to invest.
We are going to invest it in holding a class stall at the next school fair.
As a class, we have £20 to spend on something that we hope to sell for more than £20, in order to make a profit. We will use this profit to buy books for our class to enjoy.
After lots of ideas and some class voting, we are down to two investment ideas – two ideas that might or might not make us a profit at the school fair.
What Can Financial Risk Look Like?
We could spend the money on ingredients to make slime – lots of
kids love slime at the moment! We could charge quite a lot for each
pot of slime, but no one in the class is entirely sure how to make it, so we
might waste some of our ingredients making a batch that doesn’t work. Some parents might not let their children buy slime as it can make
quite a mess.
We could spend the money on fairy cakes, icing and decorations.
We know that most people love cakes. Cakes always sell well and we
could charge a little more for the cakes than the total cost of the
ingredients. We wouldn’t make much of a profit,
however we are confident that people would buy them if we didn’t
charge too much.
Investment 1 – The Slime Station Investment 2 – The Bake Sale
What Can Financial Risk Look Like?
Often the ideas that are likely to make more money are the ones that carry more risk.
They are usually ideas that haven’t been tried before, ideas that others have decided not to try or ideas that have failed in the past.
You could make lots of money but you could end up with nothing if it all goes wrong!
Invest for Success We are now going to play a game to learn more about financial risk.
Working in small groups, you need a dice and some counters in a centre pile. Give 20 counters to each player. Each counter is worth £1.
To play the game you have to invest your money in one of the stalls at the summer fair.
You need to choose which investment option you want to put money into – Investment 1 – the Slime Stall, or Investment 2 – the Bake Sale.
You can choose a different option on each turn or you might choose to stick with the same investment.
What do you notice about each investment option?
6
4
3
Invest for Success
To play your turn, choose an investment option, then choose how many pounds you want to invest in that stall on this turn. Write those numbers in your score table. Then roll the dice.
The number on the dice will tell you how much money you have gained or lost on this turn.
If you gain money, you can take the correct number of ‘£’ counters from the centre pile, to show your new total.
If you lose money, you must give the correct number of ‘£’ counters to the centre pile.
Record your progress on your returns table and be ready to discuss how you played the game.
If you run out of money, you can’t make any more investments so you are out of the game!
1
2
5
I have rolled a 4.
I have gained a return of £2! Now I have £22.
£4The Slime Station
I have rolled a 1.
I have lost double my investment! Double £3 is
£6. I have lost £6.
£3The Bake Sale
Invest for Success Good luck with your investments!
How did you play the game?
What were your returns like?
What risk did you take?
Invest for Success Although the potential gains with investment option one were greater, the financial risks were also greater. This puts our money in danger. By choosing an option with a lower risk, you are more likely to get your investment back. It is the sensible option to protect our money, by minimising our financial risk.
We need to look after our money carefully and spend it wisely.
This means keeping it in the most safe way we can and investing it sensibly.
Consolidating Reflecting
Consolidating
Look After It! Using what we have learned about financial risk, we are now going to make a poster advising people on how to avoid financial risk. Use what we have discussed to appeal to people about the best way to keep their money safe.
Can you explain the words we learned earlier, before you start your poster? Which ones will you try to include in your task?
Word Bank
Reflecting
What Advice Would You Give? Look carefully at the words we have been using. In light of what we have learned today, can you use one of these words to advise someone about financial risk?
investment gain interest risk
bankrupt inflation value
Share your idea with your partner and see if they agree or disagree.
The Big Questions