Once upon a time, there was a little girl named Lily. Lily loved saving her money, and every week she would put some of her allowance into a special savings account at the bank.

One day, Lily's mom told her about a new program the bank was offering called "dividends". Dividends were extra money that the bank would give her just for keeping her money in the savings account. Lily was so excited and couldn't wait to see how much money she would get from the dividends.

But then, Lily's friend Sophie asked for a loan to buy a new bike. Lily wanted to help her friend, but she didn't want to lose the money she had saved. Her mom explained to her that when you take out a loan, you have to pay it back with interest. This meant that Lily would have to pay back more money than she had borrowed.

Lily thought about it for a while and decided she still wanted to help her friend. So, she went to the bank and took out a loan to give to Sophie. But, she made sure to read all the terms of the loan carefully before she signed anything. The terms told her how much interest she would have to pay, how long she had to pay the loan back, and what would happen if she couldn't pay it back on time.

With the loan, Sophie was able to buy the bike she had been wanting. And, because Lily had made sure to follow the terms of the loan, she was able to pay it back on time and still receive her dividends from the savings account.

From then on, Lily learned the importance of saving her money, understanding the terms of loans, and being a good friend.

The end.

Reflections

1. What is a savings account?
2. What is a dividend?
3. What did Lily's friend Sophie need help with?
4. Why did Lily have to read the terms of the loan carefully?
5. What did Lily learn from this experience?
6. Why is it important to understand the terms of a loan?
7. Do you think it's a good idea to help friends by lending them money? Why or why not?