South African flag


National Gambling Board

South African Responsible Gambling Foundation

Money Issues - Money and Decision Making

BlackboardBy the end of this Unit you will be able to:

  • Introduction
  • Money makes the world go round
  • Money is limited
  • Decision making

Scope of this Module:

In this Module we will be looking at a range of topics around that all important item in all our lives: - Money.  If we consider for a few minutes we will realise that without money it is difficult to survive. When psychologists draw up a list of what needs people have, they start by stating what may seem obvious – that firstly people need food and water; then they need shelter and clothing; only then can they start worrying about issues like relationships, happiness, and personal growth and so on. The module consists of five parts. In Unit 1 we will look at money and decision making, covering the topics of how money makes the world go around; discussing how money is limited and then looking at decision making with regard to money.

In Unit 2 we will look at our own finances – personal finances. We will cover the topics of the difference between essentials and luxuries and look at how to draw up your own budget – an essential part of managing money. There will also of course be an Activity to give you a hands-on experience of how to do this. In Unit 3, we will cover ideas on how to make your money grow – we all want to stretch our money a little   further! We will cover the topics of what is meant by income and expenses when we discuss money. We will also discuss what might be new concepts to you, such as profit, loss, surplus and shortfall. Finally we will look at how to draw up a Budget – but this time it will be Activity based and relate to a community outing with a range of streams of income.  In Unit 4 we will look at how you secure that something special you have always wanted. This touches on the topic of saving which will be covered more fully in Unit 5. Basically however in Unit 4 we will look at a simple definition of saving; then we move on to describe the history of banking in South Africa ; after this we will have a topic on planning your own saving.

In Unit 5 the last unit in this Module we will look at saving in more detail. Firstly we will examine ideas about saving in an overview section or topic; then we will go on to describe different types of bank accounts. Then we move on to look at a common form of saving in South Africa, namely through savings clubs, often known as stokvels. Then we will give you some pointers on how to choose what form of saving might suit you the most. In summary we will be dealing with:-

  • Money and Decision Making
  • Personal Finances
  • Making your money grow
  • Secure something special!
  • Saving: Why and How to

Topic 1: Money makes the world go round ..........

In terms of the Constitution of our country which was adopted after the first democratically elected government in 1994, all people in South Africa are entitled to the basics of life. These are defined as the right to education, health, food security and housing. We would probably all agree that these are essential for life in a modern society.

Word Box

Barter: - To exchange or swap one thing for another
Inhabitants: - People living in a particular place
Surplus: - More than you need

In early times people bartered goods. In Hunter Gatherer societies such as the San people who were the earliest inhabitants of South Africa, people who for example had more fruit than they needed could swap this surplus for surplus seafood that another group might have. This system of bartering works well at times when what people want matches with what another group has. However what about seasonal fruit or other crops? They cannot be exchanged immediately. People therefore started using other rare items such as particular shells, like the cowry shell with patterns added, as a form of money. You could keep the shells or beads given to you for example for some fish, until the food you wished to have was available and then exchange it for those goods.

Later when precious metals such as gold and silver were discovered these were used as “money” until gradually coins that are stamped and identical, as we know them today came into use. Even later paper money started being used.

Talking Point!

Can you think of any situation nowadays when people might swap goods rather than buy and sell them? (think of having many vegetables and needing a bag of mealie meal)

The original inhabitants of South Africa, the San and the Khoikhoi people had no money as we know it today and notes and coins were only introduced with the first Dutch settlers who arrived in the Cape in the 1600’s.

Did you know?

The Khoikhoi people measured their wealth in terms of cattle. They exchanged or bartered cattle for copper, iron, beads and tobacco with the Dutch settlers.


Activity 1:  I wish.........
Small groups

In your small groups brainstorm what you would do if you won the Lotto prize money of R5 million rand. Write down all your ideas. Then make a poster with a list of all the things you would spend money on. You may illustrate your poster as you wish. Compare your posters to those of the other groups. Were they similar? How were they different?

Topic 2: Money is limited

Word Box

Budget:- The set amount of money available to be spent on a particular item, or project.
The word “budget” can also mean “less expensive” as in “budget” meals as compared to ”expensive” meals.


Talking Point!

The expected total budget for the 2010 Soccer
World Cup held in South Africa is over R19 billion Rand. Do you think this money could have been better spent some other way? What about housing; education; health?

Only the very wealthiest people in the world do not have to worry about what they spend their money on. For most people there is a set amount of money available to them to spend. We refer to the set amount of money available to be spent on something, as a budget. All households have budgets. All projects such as preparing for the 2010 World Cup have a set budget.

Since there is generally a limit on what we can spend, this means that everyday we are faced with decisions about money.  Sometimes it is hard to decide what to spend money on. You have probably all experienced going shopping with a limited amount of money to spend. You may see some thing that you really want to buy but you know you cannot afford it. If you buy the item you want, this might mean that you will run short of money to spend on something that is absolutely essential like food for the family In other words you have to stick to your budget.

Activity 2: Role Play

In your pairs role play the following scenario:-
A mother and her son are out shopping. The son sees a pair of shoes that he really wants. He asks the mother to buy them for him.

In your pairs, with one person playing the role of the son, and the other person the role of the mother, role play the discussion that might follow. As the son you should try to be as persuasive as possible. As the mother you must put forward good reasons why the son can’t have the shoes.
Discuss how hard it is to say no to buying an item a child wants.

Topic 3: Decision making

In the role in the previous topic, the mother was making a decision about what to spend her money on. Sometimes this is difficult to do. How do you make a good decision about money and spending?

In all decision making we have to look at all sides of the issue. There are pros and cons to all decisions. “Pros” (meaning “for”) are the reasons for deciding on a particular action; the “cons” (meaning “against”) are those things that are against making the decision.

For example a pro for spending money on an item of clothing is that you will; have something special to wear. A con might be that you then will not have enough money to afford to go to pay school fees.

There are certain key features that we need to be aware of:-many making decisions about money:-

  • The difference between “want” and “need”:-

Wanting something is not a good enough reason to spend money that is limited.
Needing something means that that we cannot live without it – it is a necessity.

  • Consequences of buying something:-

We need to be aware of whether buying something now may mean that we cannot afford something we may need later.

  • Possibility of saving now to buy later:

You need to consider whether you can put aside some part of the money now and add to it later - in other words learning to save for desired items.

Decision making Checklist

  • Have I considered all the pros and cons?
  • Can I afford this?
  • Do I really need it?
  • Can I save something now towards it?
  • What will I have to sacrifice (give up)  now if I buy it?
Talking Point!

Do you think that people who are very rich should give some of their money to help poor people? Why or why not?


Word Box:

Sacrifice:  to give up something’
Consequences:   results of taking certain actions


Did you know?

Oprah Winfrey, the famous American Television Talk Show host, who started out life as a poor young girl is now worth about 2.5 billion dollars – that is 2.5 million million!  She does give generously to charities and has funded a special school for girls in South Africa.


Self assessment
Fill in this checklist:-

  • I can now briefly describe the history of money
  • I now understand that there is a limit to the amount of money we have to spend
  • I now know more about how to make decisions regarding money
  • What did you enjoy most about this Unit?
  • What did you enjoy the least about this Unit?