Values

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 1.17.4.A1

• Homework– Values Auction Reflection

worksheet 1.17.4.A3– Values Auction Worksheet 1.17.4.A2

Needs vs. Wants

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 1.17.2.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

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.

Setting Financial Goals

• Activity Worksheet– What Is Missing? worksheet 1.17.3.D2

• Homework– Setting a Financial Goal

worksheet 1.17.3.A1