1. 1.17.2.G1 Financial Decisions “Take Charge of Your Finances” Advanced Level

2. 1.17.2.G1 © Family Economics & Financial Education –May 2012 – Financial Decisions – Slide 2 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona What is a Value? Value - a fundamental belief or practice about what is desirable, worthwhile, and important to an individual What do you value? How Do You Spend Your Money SkitHow Do You Spend Your Money Skit-What does Ethan value? What does Ethan say a trade-off & opportunity cost are?

3. 1.17.2.G1 © Family Economics & Financial Education –May 2012 – Financial Decisions – Slide 3 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Everyone has different values Family Financial Security ? Education Helping others Honesty

4. 1.17.2.G1 © Family Economics & Financial Education –May 2012 – Financial Decisions – Slide 4 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona What influences your values? FamilyFriends/Peers Teachers Culture Media ?

5. 1.17.2.G1 © Family Economics & Financial Education –May 2012 – Financial Decisions – Slide 5 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona What contributes to the decisions you make? Financial Decisions Values Needs Wants

6. 1.17.2.G1 © Family Economics & Financial Education –May 2012 – Financial Decisions – Slide 6 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Needs and Wants Needs – something thought to be a necessity or essential items required for life Wants– something unnecessary but desired or items which increase quality of living

7. 1.17.2.G1 © Family Economics & Financial Education –May 2012 – Financial Decisions – Slide 7 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona What are your needs and wants? Move towards the arrow indicating whether you feel each item is a need or a want Needs Wants Perception of needs versus wants is dependent on personal values

8. 1.17.2.G1 © Family Economics & Financial Education –May 2012 – Financial Decisions – Slide 8 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Brand new clothing A daily soda or coffee beverage A personal automobile Downloading music A refrigerator At least three meals per day Shoes Watching or participating in athletic activities A computer A warm and safe place to live A television What are your needs and wants? Needs Wants

9. 1.17.2.G1 © Family Economics & Financial Education –May 2012 – Financial Decisions – Slide 9 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Worksheets Values Needs & Wants Big Bang Theory – Penney & Leonard disagree on wants & needs. Big Bang Theory

10. 1.17.2.G1 © Family Economics & Financial Education –May 2012 – Financial Decisions – Slide 10 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Why do needs and wants matter? Will help you decide what to spend and not spend your money on Trade-off - giving up one thing for another Opportunity cost - the value of the next best alternative that must be forgone when making a decision Use trade-offs and opportunity costs to help you make these decisions Is the trade-off to your decision a need or a want? What is the value (opportunity cost) of that trade-off to you?

11. 1.17.2.G1 © Family Economics & Financial Education –May 2012 – Financial Decisions – Slide 11 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Shelbi’s Decisions Help Shelbi identify her trade-offs and opportunity costs

12. 1.17.2.G1 © Family Economics & Financial Education –May 2012 – Financial Decisions – Slide 12 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Summary Financial Decisions WantsNeedsValues Analyzing trade-offs and opportunity cost will help you determine which decisions to make

13. 1.17.2.G1 © Family Economics & Financial Education –May 2012 – Financial Decisions – Slide 13 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Why is it important to understand what influences your decisions? Understanding what influences your financial decisions Decisions that create high well-being

14. 1.17.2.G1 © Family Economics & Financial Education –May 2012 – Financial Decisions – Slide 14 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Needs, Wants, and Cupcakes Icing and decorations represent wants, the extra items that make our lives interesting and enjoyable. The cake part of a cupcake represents our needs. They must be present and addressed before considering any icing or decorations (wants). When making spending decisions, consider if your needs are met before spending on any of your wants. What you determine to be a need versus a want will depend on your personal values, just like your preference for different types of cupcakes.