1. 1.17.3.G1 Setting Financial Goals “Take Charge of Your Finances” Advanced Level

2. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 2 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Letter To My Future Self Directions: Write a letter to your future‐self detailing what you think your life will be like in five years. Your letter must address at least five of the following seven categories:  Where you will live  What type of transportation you are using  Education level achieved  If you have a family or not  How much money you will make  Type of career you have chosen  What types of activities you enjoy.

3. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 3 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Financial Planning Financial planning- A tool used to achieve financial success based upon the development and implementation of financial goals

4. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 4 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Goals Goal – the end result of something a person intends to acquire, achieve, do, reach, or accomplish sometime in the near or distant future Financial goals – specific objectives to be accomplished through financial planning Education goals - enable individuals to prepare for future success in the workplace

5. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – 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 1.17.3.G1 Short-term and Long-term Goals Goal Underline events in your letter that can be achieved with a short- term goal Put parentheses around events in your letter that can be achieved with a long-term goal Short-term goals- specified as less than one year Long-term goals - specified as more than one year

6. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – 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 1.17.3.G1 The Importance of Goal Writing  A study in What They Don’t Teach You at Harvard Business School by Mark McCormack  1979- Students were asked, "Have you set clear, written goals for your future and made plans to accomplish them?" 3% had written goals and plans 13% percent had goals, but they were not in writing 84% percent had no specific goals at all

7. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – 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 1.17.3.G1 And what about that 3%  Ten years later….the 3% that had written goals and plans were earning, on average, ten times as much as the other 97 percent put together Why is goal setting important?

8. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – 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 1.17.3.G1 Factors for Successful Goal Setting 1. Be sure the targeted accomplishment is something you really want or need. 2. Make sure the goal does not contradict any of your other goals. 3. Write your goal down on paper. Be specific. Vague goals are unattainable. Write it in positive form, not negative. Your mind responds more to positive ideas. Be sure it is realistic (not too high or low).

9. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – 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 1.17.3.G1 Factors for Successful Goal Setting 4. Identify  The obstacles you will need to overcome. (fear, peer pressure, etc.)  The resources you have available to help you. (friends, money, etc.)  The tools you will need. (education, skill, dedication, etc.) 5. Establish a deadline for your goal.

10. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – 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 1.17.3.G1 Factors for Successful Goal Setting 6. Make a plan, using information from steps 3 – 5. List all of the activities necessary for reaching your goal. Prioritize the activities. Rewrite the activity list as a timeline of short term goals. Identify the resources needed for each short term goal. 7. Focus on the end results (the “payoffs” – benefits/advantages) of achieving your goal. 8. After you have accomplished some of the short term goals, re-evaluate and make adjustments (if necessary).

11. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – 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 1.17.3.G1 SMART Goals SpecificMeasurableAttainableRealisticTime Bound State exactly what is to be done Include how the goal can be measured. Determine steps to reach the goal Set goals that are possible, but still challenge State when the goal will be met (Deadline)

12. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – 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 1.17.3.G1 SMART Goals S = Specific Clearly defined end result. I will reduce my debt. I will reduce the amount I owe on my car loan.

13. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – 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 1.17.3.G1 SMART Goals M = Measurable Exactly how you will know that the goal has been met. I will reduce the amount I owe on my car loan. I will reduce the amount I owe on my car loan by $1,000.

14. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – 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 1.17.3.G1 SMART Goals A = Attainable Step-by-step plan outlining exactly how the goal can be reached. I will reduce the amount I owe on my car loan by $1,000. You have 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

15. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – 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 1.17.3.G1 How do you determine if a goal is realistic?

16. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – 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 1.17.3.G1 SMART Goals R = Realistic I will reduce the amount I owe on my car loan by $1,000 by paying an extra $100 per week. You have determined that paying your car loan is more important than any other use of your money. The opportunity cost of paying your car loan is higher than the alternative of saving that money.

17. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – 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 1.17.3.G1 SMART Goals T = Time Bound Specifically state when the goal will be reached. 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.

18. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – 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 1.17.3.G1 SMART Financial Goals State exactly what is to be done with the money involved Specific Write the exact dollar amount the goal is for Measurable Determine how it can be reached (often determined by a budget) Attainable Set goals for something that is possible Realistic Specifically state when the goal needs to be reached Time Bound

19. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – 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 1.17.3.G1 SMART Financial Goal GoalSpecificMeasurableAttainableRealisticTime Bound I plan to save for a down payment on a new car I plan to save $5,000 for a down payment on a new car I plan to save $5,000 for a down payment on a new car by saving $200 from every paycheck It is realistic to save $200 from each paycheck because I usually waste the money on unnecessary items instead of saving it I plan to save $5,000 for a down payment on a new car by saving $200 from each paycheck for two years I want to buy a new car

20. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – 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 1.17.3.G1 SMART Education Goals State exactly what is to be done with the education aspect involved S pecific Write the exact grade or class that the goal is for M easurable Determine how it can be reached, which is often determined by academic work A ttainable Set goal for something challenging and possible R ealistic Specifically state when the goal needs to be reached (Deadline) T ime Bound

21. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – 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 1.17.3.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

22. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – 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 1.17.3.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. Match each part of Austin’s goal with the correct SMART goal element

23. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – 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 1.17.3.G1 Specific Measurable Attainable Realistic Time Bound Austin will save money for college. Austin will save $600. Austin has determined that the opportunity cost of saving money is more valuable than spending an extra $25 on entertainment every month. Austin will spend $25 less on entertainment every month in order to save that $25 instead. Austin will save money for the next two years. 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. Are you correct?

24. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 24 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.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.

25. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 25 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 SMART Education Goal GoalSpecificMeasurableAttainableRealisticTime Bound I want to attend a four year college Because I want to attend a four year college, I will earn a B in algebra Because I want to attend a four year college, I will earn a B in algebra this semester 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 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 I want to attend college

26. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 26 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 What is Missing?  Find the missing element (specific, measurable, attainable, realistic, or time bound) in the following financial goals  Financial Goal #1 I plan to save $5,000 for college living expenses in four years.

27. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 27 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 What is Missing?  Financial Goal #1 Answer: Attainable

28. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 28 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 What is Missing?  Find the missing element (specific, measurable, attainable, realistic, or time bound) in the following financial goals  Financial Goal #2 I plan to save for a new computer by saving $150 each month for one year.

29. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 29 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 What is Missing?  Financial Goal #2 Answer: Measurable

30. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 30 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 What is Missing?  Find the missing element (specific, measurable, attainable, realistic, or time bound) in the following financial goals  Financial Goal #3 I plan to save $2,500 by saving $105 each month for 2 years.

31. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 31 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 What is Missing?  Financial Goal # 3 Answer: Specific

32. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 32 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 What is Missing?  Find the missing element (specific, measurable, attainable, realistic, or time bound) in the following financial goals  Financial Goal #4 I plan to save $1,500 to buy a used car by saving $75 from each paycheck.

33. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 33 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 What is Missing?  Financial Goal # 4 Answer: Time Bound

34. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 34 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 What is Missing?  Find the missing element (specific, measurable, attainable, realistic, or time bound) in the following financial goals  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.

35. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 35 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 What is Missing?  Financial Goal # 5 Answer: Realistic

36. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 36 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Help Paul reach his goal  Works part-time to earn $225/month  He is responsible for all expenses related to his car = $175/month  Remaining $50 of paycheck is used for entertainment and savings  Has $125 in savings to pay for unexpected expenses  He has a goal to keep a minimum of $100 in savings  Paul’s mom is supportive of his decision and will help him stay on track  Remember to consider what Paul will have to NOT spend money on in order to save money for his new phone Paul would like to purchase a specific new cell phone that costs $100. Help Paul write a SMART goal to save money to purchase the new cell phone. But first you need to learn a little about him…

37. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 37 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 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 Does Paul’s goal include all elements of a SMART goal?

38. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 38 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Life Happens… Unexpected events = chance cards 1. Choose one: A newer, more expensive cell phone is announced that costs $150. Paul has decided that he would rather purchase the new phone. Paul’s car needed a minor repair that cost $50. Paul misses a shift at work, which decreases his paycheck by $30. Paul had to purchase $35 worth of supplies to complete a final project for one of his classes. 2.Adjust Paul’s goal to make sure he is still successful at reaching his goal! 123 4

39. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 39 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Life Happens… Was it hard to reevaluate Paul’s goal to adapt to life changes? What would happen if Paul didn’t reevaluate his goal after unexpected events occurred in his life?

40. © Family Economics & Financial Education – Revised April 2011 –Values, Needs vs. Wants, & Goal Setting Unit – Setting Financial Goals – Slide 40 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.17.3.G1 Now it’s your turn! 1.2.3. Write one SMART 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