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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• 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 1.17.4.A1
• Homework– Values Auction Reflection
worksheet 1.17.4.A3– Values Auction Worksheet 1.17.4.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 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 GoalsEach 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 GoalsEach 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 GoalsEach 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 GoalsEach 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 GoalsEach 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.