Unit 1 – Decision Making Personal Finance

© Take Charge Today – January 2006 – Decision-Making Magic – Slide 2 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 “Most people don’t plan to fail. They simply fail to plan!”

© Take Charge Today – January 2006 – Decision-Making Magic – Slide 3 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Needs vs. Wants Need - something necessary or required for life oFood, water, clothing and shelter

© Take Charge Today – January 2006 – Decision-Making Magic – Slide 4 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 How Much Money Does A Person Need? Families in India earn $1.00 to $2.00 a day. Could your family live off $1.00 to $2.00 a day? What do you think families in India think they NEED? How do values influence needs? oYou need shelter, but do you NEED a mansion? oYou need clothes, but do you NEED designer clothes?

© Take Charge Today – January 2006 – Decision-Making Magic – Slide 5 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Needs vs. Wants Want - something unnecessary but desired May increase the quality of living or make a person happier oMP3 player, Play Station, designer clothes How do values influence wants? oIf being popular or having all of the newest gadgets is valued, a person may have a lot of wants

© Take Charge Today – January 2006 – Decision-Making Magic – Slide 6 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Setting Goals Short Term oWithin three months Medium Term Goals oThree months to a year Long Term Goals oMore than a year

© Take Charge Today – January 2006 – Decision-Making Magic – Slide 7 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Your Decisions Think about some of the decisions you have made in the past week? oWrite down one of those decisions on each of the three index cards. Are they routine or major decisions? oShare one of your decisions and explain whether it is a routine or major decision.

© Take Charge Today – January 2006 – Decision-Making Magic – Slide 8 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 What factors in your decision? Values oWhat is important to your family, others in your culture Peers oPeople You know oPressure for positive or negative behaviors

© Take Charge Today – January 2006 – Decision-Making Magic – Slide 9 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 What factors in your decision Habits oYou are accustomed to doing it this way Feelings oIf you do make a certain decision oIf you do not make a certain decision

© Take Charge Today – January 2006 – Decision-Making Magic – Slide 10 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 What Factors in Your Decision? Family oYour Family’s Preference oDecisions other family members have made Risks & Consequences oWhat (or how Much) you stand to win oWhat (or how much) You stand to lose Age oMinor oAdult

© Take Charge Today – January 2006 – Decision-Making Magic – Slide 11 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Decision-Making Process It guides individuals to think through all components of making a good decision STEPS: 1. Identify the problem 2. List alternatives 3. Decide 4. Evaluate the Results

© Take Charge Today – January 2006 – Decision-Making Magic – Slide 12 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Steps 1.Identify the Problem oKnow the problem or question before searching for an answer 2.List Alternatives oBrainstorm pros and cons for all of the possible choices

© Take Charge Today – January 2006 – Decision-Making Magic – Slide 13 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Steps Continued 3.Decide oMake the best choice after thinking about all of the consequences 4.Evaluate the results oThis will help in making better decisions in the future

© Take Charge Today – January 2006 – Decision-Making Magic – Slide 14 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Benefits of Good Decision Making When decision making skills improve, quality of life is enhanced Making better choices to your decisions results in better use of time, money and other resources

© Take Charge Today – January 2006 – Decision-Making Magic – Slide 15 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Risks Associated with Decision Making Personal Risks factors that may create a less than desirable situation. Personal risk may be in the form of inconvenience, embarrassment, safety, or health concerns.

© Take Charge Today – January 2006 – Decision-Making Magic – Slide 16 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Opportunity Costs with Decision Making Opportunity Costs orefers to what a person gives up when a decision is made. Personal Opportunity Costs omay involve time, health, or energy. For example, time spent on studying usually means lost time for games or working. Financial Opportunity Costs oinvolve costs of decisions made.