2.1.4.G1 Setting Financial Goals Personal Finance

2.1.4.G1 © Take Charge Today –August2013 – Money in Your Life – Slide 2 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona G1 Recap – Financial Decisions Financial Decisions are influenced by – ________ Values enable us to make ________ that reflect what is important to us

2.1.4.G1 © Take Charge Today –August2013 – Money in Your Life – Slide 3 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona G1 Well-being can be divided into five domains Physical Intellectual Emotional _________

2.1.4.G1 © Take Charge Today –August2013 – Money in Your Life – Slide 4 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona G1 What contributes to financial well-being? Physical Intellectual Emotional Social Financial Managing _______ in ways that build a sense of understanding, competence and control. _______ financial well- being Your financial outlook

© Take Charge Today – August 2013 – Setting Financial Goals – Slide 5 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Set Goals! Goal – something you are working to _________ or _________ within a defined period of time. Goals need to be realistic, have a target _______, and if possible, an associated _______. Setting goals is like creating a map for a ______ ______

© Take Charge Today – August 2013 – Setting Financial Goals – Slide 6 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 How can goal setting benefit you? Creates a _____ and provides guidance for your _______ Helps make the _____ you want to live a reality Helps with ________ making Helps _______ well-being

© Take Charge Today – August 2013 – Setting Financial Goals – Slide 7 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Is it realistic to write goals for every decision you make? Routine DecisionsMajor Decisions Explanation Example Goal? Daily decisions that don’t require a lot of thought Require thought, effort, time, personal discipline What to wear in the morning What to do after high school graduation Is it realistic to write goals for_________decisions? Important to write goals for ________decisions

© Take Charge Today – August 2013 – Setting Financial Goals – Slide 8 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 How can goal setting help you manage your money? Financial Planning - managing _______ continuously through life in order to reach financial goals and protect assets Financial Goals - specific __________ (or goals) that are accomplished through financial planning Goal setting is important to ____________ planning Setting financial goals will help you make ____ ___ _____spending decisions Financial plans need to be ___________ during different stages in life. Financial planning helps you have __________ for saving and investing.

© Take Charge Today – August 2013 – Setting Financial Goals – Slide 9 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Elements of a successful goal… SMART __________ ___________________ ________________ ______________ ______ __________

© Take Charge Today – August 2013 – Setting Financial Goals – Slide 10 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Lacey’s Example Current GoalSPECIFIC Goal S = Specific _________ defined end result Financial goal = state ________ what plan you have for the money involved I will reduce my debt. I will reduce the amount I owe on my car loan.

© Take Charge Today – August 2013 – Setting Financial Goals – Slide 11 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Lacey’s Example Current GoalMEASURABLE Goal M = Measurable Determine _________ when you will know that the goal has been met Financial goal = state the ________ dollar amount I will reduce the amount I owe on my car loan by $1,000. I will reduce the amount I owe on my car loan.

© Take Charge Today – August 2013 – Setting Financial Goals – Slide 12 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Lacey’s Example Current GoalATTAINABLE Goal A = Attainable Create a step-by-step plan outlining exactly how the goal can be ____________ Financial goal = Often determined by a spending plan or _________ I will reduce the amount I owe on my car loan by $1,000. Lacey has an extra $100 to spend: I will reduce the amount I owe on my car loan by $1,000 by paying an extra $100 per month

© Take Charge Today – August 2013 – Setting Financial Goals – Slide 13 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 R = Realistic Trade-off - _________ up one thing for another Opportunity cost - the ________ of the next best alternative that you will give up as a result of your plan Goals need to be _________ with a target __________. Examine the ______________ of that goal Consider the trade-offs and opportunity costs

© Take Charge Today – August 2013 – Setting Financial Goals – Slide 14 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Lacey’s Example Current GoalREALISTIC Goal R = Realistic I will reduce the amount I owe on my car loan by $1,000 by paying an extra $100 per week. Lacey has determined that paying her car loan is more important than any other use of her money. The opportunity cost of paying her car loan is higher than the alternative of saving that money.

© Take Charge Today – August 2013 – Setting Financial Goals – Slide 15 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Lacey’s Example Current GoalTIME BOUND Goal T = Time Bound Specifically state ________ the goal will be reached Consider whether your goals are short-term or long-term Short-term goal – attained in _______ than one year Long-term goal – attained in ________ than one year Financial goal – make sure to consider your long-term financial needs when ____________ financial goals I will reduce the amount I owe on my car loan by $1,000 by paying an extra $100 per week. I will reduce the amount I owe on my car loan by $1,000 in 10 weeks by paying an extra $100 per week.

© Take Charge Today – August 2013 – Setting Financial Goals – Slide 16 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 SMART Financial Goals Summary SMART Specific Measurable Attainable Realistic Time Bound State exactly what is to be done with the money involved Write the exact dollar amount Create a step-by-step plan outlining exactly how the goal can be reached Think through the trade-offs and opportunity costs to analyze the consequences of your goal to make sure it isn’t unattainable Specifically state when the goal will be reached

© Take Charge Today – August 2013 – Setting Financial Goals – Slide 17 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Show Me the Goal! Austin needs help writing a SMART goal She has identified all parts of the goal You need to help her classify each element of a SMART goal Then, combine the parts of the goal to create a final SMART goal Austin’s Book of Goals Age 16 1.Save money

© Take Charge Today – August 2013 – Setting Financial Goals – Slide 18 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Specific Measurable Attainable Realistic Time Bound Austin will save money for college. Austin will save $600. Austin will spend $25 less on entertainment every month in order to save that $25 instead. Austin has determined that the opportunity cost of saving money is more valuable than spending an extra $25 on entertainment every month. Austin will save money for the next two years. What is Austin’s final SMART goal? Austin will save $600 for college. Austin has decided that he is willing to spend $25 less on entertainment every month in order to save $25 per month for the next two years.

© Take Charge Today – August 2013 – Setting Financial Goals – Slide 19 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Example of a SMART Financial Goal Pay off $5,000 in credit card ________ in 2 years It is – Specific – _____________ – Attainable – _____________ – Time Bound Is going to college a goal or dream?

© Take Charge Today – August 2013 – Setting Financial Goals – Slide 20 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Once you write a goal, how can you ensure that you reach it? Continually __________ your goals – What will you do if something gets in the way of reaching your goal? Make your goals ____________ – Ask a friend or family member to hold you __________________ – Use a goal setting website ________ yourself for reaching your goal

© Take Charge Today – August 2013 – Setting Financial Goals – Slide 21 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Your First Financial Goal After you get your first job, your first financial goal should be ______________ a fund for _________________. You should have 3-6 months of _________ money in order to pay your bills if you cannot _________. This emergency fund should have a high degree of _________ and ___________.

© Take Charge Today – August 2013 – Setting Financial Goals – Slide 22 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Summary How can goal setting _______ you? What are the __________ of a SMART goal? Why is setting financial goals ____________? What is a _______?

© Take Charge Today – August 2013 – Setting Financial Goals – Slide 23 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona G1 Now it’s your turn! Write one SMART financial goal for yourself from your letter Ask your group members if your goal includes all of the elements of a well written goal Based upon feedback from your group, edit your goal