VALUES, NEEDS, WANTS, AND GOAL SETTING ESSENTIALS Financial Literacy VALUES, NEEDS, WANTS, AND GOAL SETTING ESSENTIALS

WHAT IS A VALUE? What are examples of values? A value is a fundamental belief or practice about what is desirable, worthwhile, and important to an individual What are examples of values? Financial security Family Helping others Education A successful and/or satisfying career Religious commitment Honesty Good health

What influences a person’s values? Family Life Experiences Friends Are your values the same as the person sitting next to you? Law Teachers Religious Affiliations Media Work/ Career

Values, needs, wants, and goals influence a person’s daily decisions Values guide a person’s needs, wants, and goals Values Wants Goals Needs Values, needs, wants, and goals influence a person’s daily decisions Decisions affect an individual’s financial situation

What would the world be like if everyone had the same values? IMAGINE What would the world be like if everyone had the same values? Letter to Myself Questions 1 and 2

NEEDS vs. WANTS A need is something thought to be a necessity or essential items required for life. Examples of needs: Food Water Shelter A want is something unnecessary but desired or items which increase the quality of living. Examples of wants: Car stereo MP3 player Designer clothes

Everyone has different interpretations of needs and wants. NEED OR WANT? YOU DECIDE! Clothing Going to the movies Going out to eat A place to live A car/truck A computer Owning an MP3 player Cell phone Owning a vacation home Food Everyone has different interpretations of needs and wants. This is based on… their personal values! Letter to Myself Questions 3 and 4

Identifying goals makes decision making easier. WHAT IS A GOAL? A goal is defined as the end result of something a person intends to acquire, achieve, do, reach, or accomplish sometime in the near or distant future. Identifying goals makes decision making easier.

HOW DO VALUES, NEEDS, WANTS AND GOALS RELATE TO FINANCIAL DECISIONS?

TYPES OF GOALS Goals Financial goals are specific objectives to be accomplished through financial planning. Education goals enable individuals to prepare for future success in the workplace . Letter to Myself Questions 5-7 Short-term goals are specified as less than one year. Long-term goals are specified as more than one year.

SMART GOALS Financial and education goals should be 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

SMART EDUCATIONAL GOAL Goal – “I want to attend college.” SMART goal – Specific – I want to attend a four year college Measurable – Because I want to attend a four year college, I will earn a B in algebra Attainable – Because I want to attend a four year college, I will earn a B in algebra this semester Realistic – 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

SMART FINANCIAL GOAL Goal – I want to buy a new car SMART goal – Specific – I plan to save for a down payment on a new car Measurable – I plan to save $5,000 for a down payment on a new car Attainable – I plan to save $5,000 for a down payment on a new car by saving $200 from every paycheck Realistic – 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.

WHAT IS MISSING? Attainable Financial Goal #1 Find the missing SMART goal element (specific, measurable, attainable, realistic, or time bound) for each of the following financial goals Financial Goal #1 I plan to save $5,000 for college living expenses in four years. Attainable

WHAT IS MISSING? Measurable Financial Goal #2 I plan to save for a new computer by saving $150 each month for one year. Measurable

WHAT IS MISSING? Specific Financial Goal #3 I plan to save $2,500 by saving $105 each month for 2 years. Specific

WHAT IS MISSING? Time Bound Financial Goal #4 I plan to save $1,500 to buy a used car by saving $75 from each paycheck. Time Bound

WHAT IS MISSING? Realistic 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. Realistic

SUMMARY A value is a fundamental belief or practice about what is desirable, worthwhile, and important to an individual A need is something thought to be a necessity or essential items required for life. Examples include food, water, and shelter A want is something unnecessary but desired or items which increase the quality of living A goal is defined as the end result of something a person intends to acquire, achieve, do, reach, or accomplish Values Wants Goals Needs

Values guide a person’s needs, wants and goals SUMMARY Values guide a person’s needs, wants and goals This influences a person’s daily decisions, which may affect their financial situation Goals should be written down as SMART goals Specific, measurable, attainable, realistic, and time bound

WHY IS IMPORTANT TO WRITE SMART GOALS? Practice writing SMART goals! Letter to Myself Question 8