1. © Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Slide 1 Chapter 6 LESSON 6.1 Choose Financial Goals Objectives: By the end of class, students will be able to:  Identify and prioritize your financial goals  Draw conclusions and create S.M.A.R.T. Goals  Explain how your goals might affect your family and community

2. © Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Slide 2 Chapter 6 Types of Financial Goals  Budget - A plan for dividing your income among spending and saving options.  Short-term financial goals- Financial goals that you would like to achieve within a year.  Long-term financial goals- Financial goals that you would like to achieve over a period of years  Balancing short-term spending with long-term success – Not easy to put into practice, requires discipline and a vision of the long term success.

3. © Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Budgets-  Most budgets are based on short and long term goals.  The first step in budgeting is to consider the important goals you have set in your life plan. You should ask yourself the following questions:  What are my Short term goals?  What are my long Term goals? Slide 3 Chapter 6

4. © Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Is a budget just about paying bills?  No! Creating a budget does set up a system by which you can pay your bills on time, but it is so much more than that. In addition to bills, you should also be setting funds aside to:  Save for educational plans: preparing for college, starting a new degree program, or furthering your own education.  Save for retirement: this is especially important for those who are not comfortable relying upon the Social Security Administration, as well as those who do not have the opportunity to set up a retirement plan through their employer.  Save for emergencies: anyone can experience unexpected medical situations, the loss of a job, or the death of a loved one. Even though no one likes thinking of these negative situations, it is important to plan for them by putting aside savings.  Pay down debt: creating personal wealth through budget strategies cannot occur until debt is paid down and investments are put into place. These are important ingredients to a successful budget and should be part of your long-term goals.investments Slide 4 Chapter 6

5. © Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Short Term Financial Goals  Paying down your debt.  Increasing your savings Having savings that you will need to rely on when life's emergencies arise such as:  Car repairs/maintenance  Home repairs/maintenance  Illness or Accident  In Case of a Layoff  Creating a Cushion to Prevent Overdrafts Slide 5 Chapter 6

6. © Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Long Term Financial Goals  These are financial goals that you would like to achieve in more than one year. These can include but are not limited to the following:  Wedding  Down Payment for your first home  Car/Home Purchase  Vacation  Higher Education  Home Remodeling  Retirement Slide 6 Chapter 6

7. © Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Slide 7 Chapter 6 LESSON 6.1 Choose Financial Goals Objectives: By the end of class, students will be able to:  Identify and prioritize your SM.A.R.T. Goals  Explain how your goals might affect your family and community

8. © Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS S.M.A.R.T. Goals  S.M.A.R.T. goals are S pecific, M easurable, A ttainable, R elevant, and T imely.  Specific – A general goal would be, “Get in shape.” But a related specific goal would be, “Join a health club and workout 3 days a week for the next 52 weeks.” A specific goal has a far greater chance of being accomplished because it has defined parameters and constraints.  Measurable – There must be a logical system for measuring the progress of a goal. To determine if your goal is measurable, ask yourself questions like: How much time? How will I know when the goal is accomplished? When you measure your progress, you stay on track, reach your target dates, and experience the exhilaration of achievement that spurs you on to continued efforts required to reach your goal. Slide 8 Chapter 6

9. © Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS S.M.A.R.T. Goals  Attainable – To be attainable, a goal must represent an objective toward which you are both willing and able to work. In other words, the goal must be realistic. The big question here is: How can the goal be accomplished?  Relevant – Relevance stresses the importance of choosing goals that matter. Slide 9 Chapter 6

10. © Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS S.M.A.R.T. Goals  Timely – A goal must be grounded within a time frame, giving the goal a target date. A commitment to a deadline helps you focus your efforts on the completion of the goal on or before the due date.  S.= Specific; M. = Measurable;  A. = Attainable; R. = Relevant; T. = Timely  S.M.A.R.T. Slide 10 Chapter 6

11. © Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS  When you identify S.M.A.R.T. goals that are truly important to you, you become motivated to figure out ways to attain them.  You develop the necessary attitude, abilities, and skills.  You can achieve almost any goal you set if you plan your steps wisely and establish a time frame that allows you to carry out those steps. Slide 11 Chapter 6

12. © Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Slide 12 Chapter 6 Your Goals Affect Others  Your family and your goals  Your current family  Your future family  Your community and your goals

13. © Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Student Practice/Application  1. Read pages 192-197 in your Economics textbook.  2. Complete Try These questions 1-5 on page 197 of your Economics textbook.  3. Complete Think Critically Questions 6, 7& 9 on page 197 of your Economics Textbook.  Extra Credit: Construct a detailed worksheet that outlines your short term spending with your long term goals Slide 13 Chapter 6