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1.17.3.G1 © Family Economics & Financial Education – Revised April 2008 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona Financial Decision Making “Take Charge of Your Finances”
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© Family Economics & Financial Education – Revised April 2008 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Personal Finance What is Personal Finance? Personal Financial Planning – arranging to spend, save and invest money to live comfortably, have financial security, and achieve goals.
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© Family Economics & Financial Education – Revised April 2008 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Things that Impact Our financial Decisions What causes us to spend money? Things we need? Things we want? Impulse? Many things impact our financial decisions. Those ‘things’ include our needs, our wants, things we value, and our goals.
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© Family Economics & Financial Education – Revised April 2008 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Things that Impact Our financial Decisions Need – Something necessary for survival. Basic categories – Food, Clothing, Shelter, and Water.
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© Family Economics & Financial Education – Revised April 2008 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Things that Impact Our financial Decisions Wants – Something you desire or wish to have. They add pleasure and comfort to our lives. Wants are unlimited and the list is never-ending.
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© Family Economics & Financial Education – Revised April 2008 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Do I Really Need This? You Decide !! Car Need – If public transportation is not available, then a car is a need. Want – Type of car, make, model, manufacturer, options are a want
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© Family Economics & Financial Education – Revised April 2008 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Things that Impact Our financial Decisions Examples of things we value: Technology Family Friends Education Shopping Pets Money Health Happiness Sports Values – the beliefs and principles you consider correct and desirable.
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© Family Economics & Financial Education – Revised April 2008 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Values Con’t. Many things can influence your values – friends, family, religion, teachers, media. How do values influence your financial decisions? Value Health – may purchase a gym membership Value Friendships – spend money on movies, dinners Value Knowledge – attend college, student loans Value Independence – own a home, rent an apartment Value Status – purchase quality items, high-end brand names. Value Wealth – save money, invest wisely.
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© Family Economics & Financial Education – Revised April 2008 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Things that Impact Our financial Decisions Goal – the things you want to accomplish. Short-Term Goals – takes one year or less to achieve. Intermediate Goals – takes 2-5 years to achieve. Long-Term Goals – takes more than 5 years to achieve.
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© Family Economics & Financial Education – Revised April 2008 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 SMART Goals Specific -State exactly what is to be done Measurable -Include how the goal can be measured Attainable -Determine steps to reach the goal Realistic - Do not set goals for something unrealistic Time Bound- State when the goal will be met
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© Family Economics & Financial Education – Revised April 2008 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Why set SMART goals? Provide Guidance and Direction Allow a person to focus on important things. Help people keep the end result in mind. Prepare us for success in the workplace.
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© Family Economics & Financial Education – Revised April 2008 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 SMART Goal Example Goal – “I want to get good grades.” To turn it into a SMART goal: Specific – I plan to raise my grade in Algebra I. Measurable – I plan to raise my grade from a C to a B in Algebra I. Attainable – I plan to stay after school on Monday’s for math tutoring. Realistic – Is this possible? Time Bound – I plan to achieve this at the end of the 1st Quarter.
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© Family Economics & Financial Education – Revised April 2008 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 SMART Goal Example Finished SMART Goal: I plan to raise my Algebra I grade from a C to a B by the end of the third quarter by attending tutoring once a week after school.
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© Family Economics & Financial Education – Revised April 2008 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 SMART Goal Example Goal – “I want to buy a new car.” To turn it into a SMART goal: Specific – I plan to save for a down payment on a car. Measurable – I plan to save $5,000 for a down payment on a new car. Attainable – I plan to save $200 from every paycheck. Realistic – Is this possible? Time Bound – I plan to save $200 from the next 25 paychecks or the next year.
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© Family Economics & Financial Education – Revised April 2008 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 SMART Goal Example Finished SMART Goal: I plan to save $5000 for a down payment on a new car by saving $200 per paycheck for the next year.
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© Family Economics & Financial Education – Revised April 2008 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Main Categories of Decision Making Routine – made on a daily basis and does not require a lot of time to think through. Major – have long-term effects on a person’s life and should be made very carefully. Financial – a major decision that impacts an individual or family’s well being.
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© Family Economics & Financial Education – Revised April 2008 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Decision Making Process Step 1: Identify the problem. Examples: Which college to choose, Which car to buy? Step 2: List Alternatives What are the pros & cons of each possible choice? Step 3: Decide Make the best choice after thinking about all the consequences. Step 4: Evaluate the Results Did you make the right decision? Evaluating will help in making better decisions in the future
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© Family Economics & Financial Education – Revised April 2008 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Factors that Influence Decision Making Age Budget Peers Time Family Opinions Habits Risks & Consequences Values
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© Family Economics & Financial Education – Revised April 2008 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Decision Making Strategies Spontaneous - decide suddenly, without thought Avoidance - by avoiding something/someone Agonizing - difficulty deciding. Desire – based on something you want. Procrastination – waiting until the last minute. Compliance – following rules Security – feels safe Intention – intended to do/purchase something.
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