Lesson Notes By Weeks and Term v5 - Grade 7

Lesson Video

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Performance objectives

• Define and differentiate between needs and wants.
• Explain what a budget is and how to create one.
• Identify different sources of income in South Africa.
• Explain the importance of saving and different saving options.
• Define entrepreneurship and identify key characteristics.

Lesson summary

This week, we're starting our EMS journey by revisiting some essential topics you covered in Grade

6. This isn't just about remembering facts; it's about building a strong foundation for the more complex concepts we'll explore in Grade

7. Understanding these basics will help you make better decisions about your money, understand how businesses work, and even contribute positively to your community's economy.

Think about it: from buying airtime to understanding why some spaza shops are more successful than others, EMS principles are at play every day in South Africa. Mastering these early concepts helps you understand the "why" behind these everyday occurrences.

Lesson notes

2.1 Needs vs.

Wants Needs: These are things that are essential for survival. If you don't have them, your health or well-being could be seriously affected. Examples include food, water, shelter, and basic clothing.

Wants: These are things that you desire, but are not essential for survival. They are often things that make life more comfortable or enjoyable. Examples include a fancy cellphone, brand-name clothes, entertainment, and takeaways. It's important to understand the difference because knowing what you need versus what you want is crucial for responsible spending and creating a budget. In South Africa, many people struggle to afford even their basic needs. Understanding this distinction is the first step in managing limited resources effectively.

Example: Imagine you receive R200 for your birthday.

Need: You need to buy school stationery that costs R

5

0. Want: You want to buy a new soccer ball that costs R

1

5

0. You need to prioritize the stationery because it is essential for your education. You might have to save up later to buy the soccer ball. 2.2 Budgets A budget is a plan for how you will spend your money over a period of time, usually a week or a month. It helps you track your income and expenses so you can make sure you're not spending more than you earn.

Steps in creating a simple budget: Determine your income: List all the money you receive (e.g., allowance, money from chores, gifts).

List your expenses: Write down all the things you spend money on (e.g., airtime, snacks, transport).

Categorize your expenses: Group your expenses into categories like "Essentials" (food, transport) and "Discretionary" (entertainment, snacks). Calculate the total income and total expenses: Add up all your income and all your expenses separately.

Compare your income and expenses: If your expenses are more than your income, you have a deficit. If your income is more than your expenses, you have a surplus.

Adjust your budget: If you have a deficit, you need to cut back on your expenses or find ways to increase your income.

Example: Zanele receives an allowance of R100 per month.

Her expenses are: R40 for airtime, R30 for snacks, and R20 for transport.

Income: R100 Expenses: R40 + R30 + R20 = R90 Surplus: R100 - R90 = R10 Zanele has a surplus of R10, which she can save or use for something else. 2.3 Sources of Income Income is the money that individuals or households receive. Common sources of income in South Africa include: Salaries and Wages: Money earned from working for an employer.

Profits from a Business: Money earned from owning and running a business.

Grants and Social Security: Money received from the government, such as child support grants or old age pensions.

Remittances: Money sent home by family members working in other places.

Rental Income: Money earned from renting out property.

Interest on Savings: Money earned from keeping money in a savings account. It is important to understand different income sources because some sources are more reliable than others. A steady salary is more reliable than profits from a small business, which can fluctuate. 2.4 Saving Saving means putting money aside for future use. It's important because it allows you to achieve your financial goals, like buying a new phone, paying for education, or having money for emergencies.

Saving Options in South Africa: Savings Account at a Bank: A safe place to keep your money where you can earn interest.

Money Box/Piggy Bank: A simple way to save small amounts of money at home.

Stokvels: Informal savings groups where members contribute money regularly and receive a lump sum at a specific time. This is a common practice in South Africa.

Fixed Deposit: A type of savings account where you deposit a fixed amount of money for a fixed period of time and earn a higher interest rate.

Example: If you save R20 per week for a year, you will have saved R20 x 52 weeks = R

1

0

4

0. This could be enough to buy a new phone or pay for a school trip! 2.5 Entrepreneurship Entrepreneurship is the process of starting and running a business. An entrepreneur is someone who takes risks and creates new products or services to solve problems or meet needs in the community. Characteristics of Successful Entrepreneurs in South Africa: Hardworking: Entrepreneurs work long hours and are dedicated to their businesses.

Creative: They come up with new ideas and find innovative solutions.

Persistent: They don't give up easily when faced with challenges.

Risk-Takers: They are willing to take calculated risks to achieve their goals.

Good Communicators: They can effectively communicate their ideas to others.

Resourceful: They can find ways to make the most of limited resources.

Example: A person who starts a small business selling vetkoek at a taxi rank is an entrepreneur. They saw a need for affordable food and decided to start a business to meet that need.