1. Essential Standard 1.00:Understand economic activities ofindividuals and families. Objective 1.02Understand characteristics of financialgoals, steps in decision making and factors that affect financial decisions.

2. Essential Questions What are the steps in goalsetting and decision making? How do individuals needs,wants, values, standards, andpriorities affect financial goalsand decisions? 3. FINANCIAL GOALS Financial Goals Financial goalsshould be SMART:are Specificaccomplished Measurablethrough and give Attainabledirection to Realisticfinancial Time-boundplanning. Learning to setfinancial goals isan important partof learning to live 4. Decision MakingSteps4. Identify the pros and1. Identify the problem &cons of each option decision to be made5. Choose the best2. Identify resources andoption gather information 6. Put the decision into3. Identify the optionsaction..just do it! (alternatives) 7. Evaluate the *team members outcomes of the brainstormdecision 5. Six Steps in Economic Decision- Making ProcessDo the Positives (+)outweigh the Negatives (-)?+ DisadvantagesAdvantagesUse T-account to determine positives and negativesGood Decision/Bad Decision5 6. Good Decision Making Following logical Good decisions leadsteps when making to the achievementdecisions helps of goals and a feelingindividuals makeof self-control andinformed choices. self-confidence. When decisions are Good decisions are amade from habit or on key to successfulimpulse, there is a independent living.greater likelihood of Who makes thosenegative outcomes.decisions? Be sure YOU aremaking the bestdecisions! 7. FACTORS THAT AFFECT FINANCIALDECISIONS Family factors Technology Cultural factors The media Social factors The marketplace Societal and Legal and moral demographic factors factors Economic factors Personal factors Steps in Decision Making 8. Personal Factors Breakdown Needs and wants Distinguishing wants from needs helps individuals andfamilies set more realistic goals and make betterdecisions. Values Understanding and prioritizing values helps individualsand families set goals and make decisions that lead togreater personal satisfaction. Standards --- Measures of quality or excellence With regard to standards for success, individuals havedifferent views of what it means to be successful. Priorities Each individual or family needs to set priorities bydeciding what is more important at any point in time. 9. Principles of Financial Planning from the Jump$tart CoalitionClassify the 12 Money doubles by the Rule of 72 Your credit past is your credit future Start saving young Stay insured Budget your money Dont borrow what you cant repay Map your financial future Dont expect something for nothing High returns equal high risks Know your take-home pay Compare interest rates Pay yourself firsthttp://www.jumpstartcoalition.org/files2010/2010_J$_Calendar.pdf 10. Factors AffectingDecisions Family structure Income level Lifestyle Size Age Stage of life cycle Health status Emergencies 11. Cultural factors Cultural and ethnic groups impact Values Beliefs Lifestyle Family structures Clothing choices What are the advantages and disadvantages of cultural diversity within a family, a school, a workplace, a community? 12. Social factors Education level Family structure Immigration Ethnicity Rural, urban, suburban community Peer pressure Community relationships and involvement 13. Societal and DemographicFactors Demography is the statistical characteristics of a population Age Sex Race Birth, marriage, death rates Where people live 14. Economic Factors Employment rate Kind and number of jobs available Inflation A period of rapid increase in the price of goods andservices Recession An extended period of slow economic growth *Review the Business Cycle-prosperity, recession,depression, recovery Government Regulations & Spending Fiscal policies affect personal & business spendingCash for clunkers, stimulus $, tax rates 15. Technology The use of mechanical or electronic devices to manipulate Information (Computers, Ipads, Fax machines, fiberoptics, GPS systems, smart phones) Objects (i.e Robots, automated assembly lines,hybrid cars) On going change impacts Training needs Replacing obsolete technology Types of jobs available 16. The Media Impacts the ways people and businessescommunicate and operate locally, nationally,and globally. Communications that reach large audienceswith the aid of publication devices that include Internet Television Voice, text, & data transmissions Publications 17. The Marketplace Supply Goods and services available to the consumer Demand Consumer desire to purchase as compared to availability Market response How quickly the market adjusts to supply versus demand 18. Legal and Moral Factors Laws that impact spending Taxation Investment and Retirement Accounts Insurance requirements Beliefs in what is right and wrong What is appropriate behavior of employers,employees, and individuals at home, work, andwithin the community. Charitable Giving and Community Service 19. Personal Factors Needs Items to survive food, clothing, & shelter Wants Not essential but desirable cell phone, Music CDs, Values A persons belief about what is important and desirable