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Setting Financial Goals

Take Charge of Your Finances 1.17.3

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 2Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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Goals

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 3Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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Goals Short-term goals – specified as less than one year

I plan to raise my English grade from a C+ to a B by the end of this academic year by asking my older brother to peer review my research paper prior to turning it in.

Underline events in your letter that can be achieved with a short-term goal.

Long-term goals – specified as more than one yearBy the end of the next academic year I would like to

purchase my first car by saving $50 per month from my part time job.

Put parentheses around events that can be achieved with a long-term goal.

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 4Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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The Importance of Goal WritingA study in What They Don’t Teach You at

Harvard Business School by Mark McCormack

1979- Students were asked, "Have you set clear, written goals for your future and made plans to accomplish them?" 3% had written goals and plans13% percent had goals, but they were not in

writing84% percent had no specific goals at all

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 5Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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And what about that 3%Ten years later….the 3% that had

written goals and plans were earning, on average, ten times as much as the other 97 percent put together.

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 6Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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SMART Goals

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 7Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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Education GoalsHelp individuals prepare for success in

the workplaceExamples include:

Earning an A on an upcoming quizAttending collegeParticipating in extra-curricular activities

Include both short-term and long-term goalsProvide guidance and directionEnable individuals to reach financial goals

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 8Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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SMART Education Goals

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 9Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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SMART Education GoalGoal – “I want to attend college.”SMART goal –

Specific – I want to attend a four year collegeMeasurable – Because I want to attend a four year college, I

will earn a B in algebraAttainable – Because I want to attend a four year college, I

will earn a B in algebra this semesterRealistic – Because I want to attend a four year college, I will

earn a B in algebra this semester to prepare me for the college entrance exam

Time Bound – Because I want to attend a four year college, I will earn a B in algebra this semester to prepare me for the college entrance exam when I am a junior in high school

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 10Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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SMART Financial Goals

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 11Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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SMART Financial GoalGoal – I want to buy a new car SMART goal –

Specific – I plan to save for a down payment on a new carMeasurable – I plan to save $5,000 for a down payment

on a new carAttainable – I plan to save $5,000 for a down payment on

a new car by saving $200 from every paycheckRealistic – 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

Time Bound – I plan to save $5,000 for a down payment on a new car by saving $200 from each paycheck for two years.

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 12Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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What is Missing? Find the missing element (specific,

measurable, attainable, realistic, or time bound) in the following financial goals

Financial Goal #1I plan to save $5,000 for college living

expenses in four years.

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 13Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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What is Missing?Financial Goal #1 Answer:

Attainable

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 14Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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What is Missing?Find the missing element (specific,

measurable, attainable, realistic, or time bound) in the following financial goals

Financial Goal #2I plan to save for a new computer by

saving $150 each month for one year.

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 15Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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What is Missing?Financial Goal #2 Answer:

Measurable

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 16Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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What is Missing?Find the missing element (specific,

measurable, attainable, realistic, or time bound) in the following financial goals

Financial Goal #3I plan to save $2,500 by saving $105 each

month for 2 years.

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 17Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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What is Missing?Financial Goal # 3 Answer:

Specific

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 18Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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What is Missing?Find the missing element (specific,

measurable, attainable, realistic, or time bound) in the following financial goals

Financial Goal #4 I plan to save $1,500 to buy a used car by

saving $75 from each paycheck

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 19Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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What is Missing?Financial Goal # 4 Answer:

Time Bound

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 20Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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What is Missing?Find the missing element (specific,

measurable, attainable, realistic, or time bound) in the following financial goals

Financial Goal #5 I plan to save $2,000 to pay for a new

computer by saving my whole paycheck for the next 6 months

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 21Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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What is Missing?Financial Goal # 5 Answer:

Realistic

© Family Economics & Financial Education – Revised April 2010 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 22Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona

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Conclusion

Review the following: Goals

Financial goals Short-Term goals Long-Term goals SMART goals

Questions?