Options/Alternatives & Plan of Action

Journal OBJECTIVE: Students will be able to… Understand the impact of market forces on their financial planning Create a plan to achieve goals that accounts for these forces. AGENDA: Options and Alternatives Desert Island Supply and Demand Making a Plan We’ll be doing a class activity for our journal, so go ahead and wait until we get class started.

Journal OBJECTIVE: Students will be able to… Understand the impact of market forces on their financial planning Create a plan to achieve goals that accounts for these forces. AGENDA: Options and Alternatives Desert Island Supply and Demand Making a Plan When I say go, I want you to go around the room and look at the terms posted on the walls. Put a checkmark in the column that best describes how much you know about that term.

Options and Alternatives

The Market! Economic Market One of the biggest factors affecting your financial plan is entirely out of your control… The Market! The Economic Market refers to the environment in which you’re trying to complete your goal This includes things like prices, availability, etc.

Scarcity Scarcity- A condition of wants in a world of limited resources; a shortage Simulation 1- In a group of four, plan how you would allocate funds for the prom. You have $9,635 to spend, but you don’t have to spend all of it. Simulation 2- In your “community,” figure out how you’re going to survive on a desert island, with the resources you’ve gathered. You need to get the things on the next slide.

Scarcity Simulation FOOD: four 3-inch strips of green paper NEEDED RESOURCES FOOD: four 3-inch strips of green paper SHELTER: 2-inch white square attached to a yellow triangle CLOTHING: a four-color paper chain EDUCATION: a four-page book with color cover

Scarcity Simulation Why was there a difference between groups’ resources? Which resources were most valuable? Which were least valuable?

Supply and Demand http://money.cnn.com/video/news/economy/2014/10/31/we-the-economy-supply-and-dance- man.cnnmoney/

Supply and Demand The Law of Supply and Demand- An economic law saying that as demand for a good increases, or supply decreases, the price goes up.

Practice Problem

Delayed v. Instant Gratification Instant Gratification- A desire to have what you want… and have it now. Examples? Delayed Gratification- A willingness to wait until the most opportune time to get what you want. Impulse Buying v. Planned Expenses Which is more financially sound?

Opportunity Cost Opportunity Cost- The cost of getting what you want (i.e. the next best thing) You want a car ($4000) and a first generation Tickle Me Elmo ($3500). You have $4100. If you get the car, Elmo is the opportunity cost. If you get Elmo, you can’t get the car (opportunity cost).

Make a Plan of Action

General Planmaking After choosing a goal appropriate for your market, decide on a series of steps to get to there. Treat these steps like “mini-goals” Follow the SMART guidelines Keep track of when you complete each step

What can you do to get more funds? Specific Tips Regardless of your goal, it’s going to require smart use of your money. What can you do to get more funds? What can you do with money that you already have?

Flyswatter Review?