Values

Lesson Objectives –Budget for item(s) upon which you place a significant value –Realize different values held by classmates –Understand the relationship between values and money

Values Value – definition –A fundamental belief or practice about what is desirable, worthwhile, and important to an individual Family, successful career, having money, etc.

Values What influences a person’s values? –Family, friends, teachers, religious affiliations, work/career, media, law, etc. –Life experiences

Values What do values affect? –Personal life, lives of others, financial decisions, etc.

Values People have different values guiding their needs, wants, and decisions –Needs: things thought to be necessary; essential items required for life Examples: food, water, shelter –Wants: things unnecessary but desired; items which increase the quality of living Examples: fancy car, video games, designer clothes

Values Values Auction Activity –Worksheet A1 Homework –Values Auction Reflection worksheet A3 –Values Auction Worksheet A2

Needs vs. Wants

Lesson Objectives –Identify the difference between a need and a want –Understand how personal financial decisions are influenced by a person’s interpretation of needs and wants

Needs vs. Wants Definitions –Needs: things thought to be necessary; essential items required for life Examples: food, water, shelter –Wants: things unnecessary but desired; items which increase the quality of living Examples: fancy car, video games, designer clothes

Needs vs. Wants Activity worksheet A1

Needs vs. Wants Activity Review –All people have different interpretations of needs and wants –Some things or items may be classified as both a need and a want based upon a person’s interpretation

Needs vs. Wants Activity Review –A person’s interpretations of needs and wants affects financial decisions Example: a person who deems a vehicle a need, will have larger expenses than a person who relies on a bicycle for transportation and sees a vehicle as a want

Setting Financial Goals

Lesson Objectives –Explain the required elements for a well- written financial goal –Understand why setting financial goals are important –Apply financial goal setting to personal life

Setting Financial Goals What is something you hope to purchase in the future? How do you plan to be able to make the purchase?

Setting Financial Goals Financial planning is setting financial goals Financial Goals (definition): –Specific objectives to be accomplished through financial planning efforts Examples: saving money, repaying debts, etc. Each goal has 5 necessary elements

Setting Financial Goals Both short-term and long-term financial goals are a necessary component of an effective financial plan

Setting Financial Goals Both short-term and long-term financial goals are a necessary component of an effective financial plan Short-term goals –specified as less than one year Long-term goals –specified as more than one year

Setting Financial Goals Each goal has 5 necessary elements: 1)Specific 2)Measurable 3)Attainable 4)Realistic 5)Time Bound

Setting Financial Goals Each goal has 5 necessary elements: 1) Specific –Exactly what is to be done with the money involved in the goal Example: I plan to save for a down payment on a new car.

Setting Financial Goals Each goal has 5 necessary elements: 2) Measurable –The exact dollar amount needed for the goal Example: I plan to save $5,000 for a down payment on a new car.

Setting Financial Goals Each goal has 5 necessary elements: 3) Attainable –Determine how it can be reached, often determined by the individual’s budget Example: I plan to save $5,000 for a down payment on a new car by saving $200 from every paycheck.

Setting Financial Goals Each goal has 5 necessary elements: 4) Realistic –Do not set an unrealistic or unattainable goal Is the person able to meet current necessary financial needs? Can they afford to be saving for this item? Example: It is realistic to save $200 from each paycheck for a down payment on a car because I usually waste the money on unnecessary items instead of saving it.

Setting Financial Goals Each goal has 5 necessary elements: 5) Time Bound –Specifically state when the goal needs to be reached Example: I plan to save $5,000 for a down payment on a new car by saving $200 from every paycheck for two years.

Setting Financial Goals Why is it important to set financial goals? –They give a financial plan specific direction. –Specific goals can help to keep a person focused and on track and provide visualization of where the person wants to be in the future. –When a person knows what his/her goals are, his/her choices in making decisions are clearer.

Setting Financial Goals Activity Worksheet –What Is Missing? worksheet D2 Homework –Setting a Financial Goal worksheet A1