1. Select one concept or terms to describe for bellwork.
Values
Scarcity
Want vs. Need
Net Worth
Steps in Financial Planning process

2. How do I make a Financial Plan?
Determine your current financial situation.
Develop your financial goals.
Identify your options.
Evaluate your alternatives
Create and use your financial plan of action.
Review and revise your plan.

3. Setting Financial Goals
Advanced Level
You will not have notes today but I have provided an information sheet for you to help you prepare for our quiz tomorrow and review for the test in the future. You may want to highlight or underline key concepts as we go through information today.

4. Short Term – Present to 6 months Long Term= 6 months or more
Goal – the end result of something a person intends to acquire, achieve, do, reach, or accomplish sometime in the near or distant future
Short Term – Present to 6 months
Long Term= 6 months or more
Why set goals? John Goddard example
Setting goals is like creating a map for a road trip

5. How can goal setting benefit you?
Creates a path and provides guidance for your future
Helps make the life you want to live a reality
Helps with decision making
Helps create well-being
Do we need to set goals for every decision that we make?
How can goal setting benefit your life?

6. Is it realistic to write goals for every decision you make?
Routine Decisions
Major 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
it isn’t realistic to write a goal for routine decisions, but major decisions that require a lot of thought, effort, and time will
benefit from goal writing.
Is it realistic to write goals for routine decisions?
Important to write goals for major decisions

7. To Goal or Not To Goal?
Which of the following decisions would you write a goal for?
When you will complete your homework this evening
Which extra-curricular activities you will participate in
When you will purchase a car
What you will eat for lunch
purchase a car – this is a major decision that would benefit from setting a goal. A goal will help the person secure funds to purchase a car and decide what type of car to purchase (including what is affordable for them).
homework this evening – this is a routine decision that would be cumbersome to write a goal for. However, this decision may affect other goals. For example, if a goal has been set to earn an A in a class, that person may wish to dedicate more time to homework each evening.
What to eat for lunch – no but may affect other goals. For example, if a goal has been set to lose weight, that will affect the decision of what to eat for lunch.
Extra curricular activities - major decision that would benefit from goal setting. A goal will help the person find time and money to complete the activities

8. How can goal setting help you manage your money?
Financial Planning - managing money continuously through life in order to reach financial goals
Financial Goals - specific objectives (or goals) that are accomplished through financial planning
Setting financial goals will help you make day to day spending decisions
Goal setting is important to financial planning
Goal setting is especially important when it comes to money. Setting financial goals can help a person make more effective day to day spending decisions, because it will be easier to make spending decisions that lead to goal achievement.
Has anyone every heard of a SMART goal – What does SMART stand for?

9. Elements of a successful goal…
Specific S M A R T
Measurable
Attainable
Realistic
Time Bound

10. S = Specific Clearly defined end result
Financial goal = state exactly what plan you have for the money involved
Lacey’s Example
Current Goal
SPECIFIC Goal
I will reduce my debt.
I will reduce the amount I owe on my car loan.

11. M = Measurable
Determine exactly when you will know that the goal has been met
Financial goal = state the exact dollar amount
Lacey’s Example
Current Goal
MEASURABLE Goal
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.

12. A = Attainable
Create a step-by-step plan outlining exactly how the goal can be reached
Financial goal = Often determined by a spending plan or budget
Amount to save/time available
Lacey’s Example
Current Goal
ATTAINABLE Goal
Could also figure out the amount by taking the amount you want to save and divide it by the time available. Maybe she wanted to reduce it by 1000 within 10 months
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

13. R = Realistic How do you determine if a goal is unrealistic?
Examine the consequences of that goal
Opportunity cost - the value of the next best alternative that you will give up as a result of your plan
Trade-off - giving up one thing for another
Consider the trade-offs and opportunity costs

14. Example
What could Lacey do with the $100 besides spend it on her car loan?
Her next best option is to save the $100
This is a trade-off
Paying off her car loan is more important to Lacey than any other use of her money
Determine what the value (opportunity cost) of the trade-off is to her
Which decision should Lacey make?

15. R = Realistic
Lacey’s Example
Current Goal
REALISTIC Goal
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.

16. T = Time Bound Specifically state when the goal will be reached
Consider whether your goals are short-term or long-term
Short-term goal – attained in less than one year
Long-term goal – attained in more than one year
Financial goal – make sure to consider your long-term financial needs when setting financial goals
Lacey’s Example
Current Goal
TIME BOUND Goal
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.

17. SMART Financial Goals Summary
Specific S M A R T
State exactly what is to be done with the money involved
Measurable
Write the exact dollar amount
Attainable
Create a step-by-step plan outlining exactly how the goal can be reached
Realistic
Think through the trade-offs and opportunity costs to analyze the consequences of your goal to make sure it isn’t unattainable
Time Bound
Specifically state when the goal will be reached

18. 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
Save money
Split into groups of 3-4 using pikme app. You may want to bring your information sheet with you. You will stay in these groups for the rest of our class period. Work as a group to match each part of the goal with the correct smart goal element. Then, combine the parts of the goal to write a final SMART goal on your whiteboard. Put up reminder (next) slide.

19. Remember the parts of a SMART goal…
Specific S M A R T
State exactly what is to be done with the money involved
Measurable
Write the exact dollar amount
Attainable
Create a step-by-step plan outlining exactly how the goal can be reached
Finished?
Realistic
Think through the trade-offs and opportunity costs to analyze the consequences of your goal to make sure it isn’t unattainable
Time Bound
Specifically state when the goal will be reached

20. Are you correct? Specific Measurable Attainable Realistic Time Bound
Austin will save money for college.
Austin will spend $25 less on entertainment every month in order to save that $25 instead.
Austin will save $600.
Austin will spend $25 less on entertainment every month in order to save that $25 instead.
Austin will save money for college.
Austin will save money for the next two years.
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 $600.
Who had Austin? As we share these you might want to fix them if you have any mistakes so you will be more likely to be correct when I get to your group. What did you have for (Specific? Measurable?) ( Attainable? Realistic? Time Bound?) What did you have as the 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.
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.

21. Are you correct? Specific Measurable Attainable Realistic Time Bound
Emmitt will apply for three jobs per week until a job is obtained
Specific
Measurable
Attainable
Realistic
Time Bound
Emmitt wants a part-time job.
Emmitt will find a part-time job that pays a minimum of $7/hour and allows him to work not more than 10 hours/week..
Emmitt wants a part-time job.
Emmitt wants to have a job by the end of the month.
Emmitt will apply for three jobs per week until a job is obtained.
Emmitt will find a part-time job that pays a minimum of $7/hour and allows him to work not more than 10 hours/week.
Emmitt has researched job availability and average pay to ensure his requirements are accurate of the job market in his community.
Who had Emmitt? What did you have for (Specific? Measurable?) (Attainable? Realistic? Time Bound?) What did you have as the final smart goal?
Emmitt has researched job availability and average pay to ensure his requirements are accurate of the job market in his community.
Emmitt wants to have a job by the end of the month.

22. Are you correct? Specific Measurable Attainable Realistic Time Bound
Laila will save $15 of her weekly allowance by giving up the purchase of her daily every drink from the vending machine at school.
Specific
Measurable
Attainable
Realistic
Time Bound
Laila will purchase new basketball shoes.
Laila will spend no more than $100 on new basketball shoes.
Laila will purchase new basketball shoes.
Laila will save $15 of her weekly allowance by giving up the purchase of her daily every drink from the vending machine at school.
Laila will purchase new basketball shoes before basketball season starts in two months.
Laila will spend no more than $100 on new basketball shoes.
Laila has determined that the opportunity cost of buying new basketball shoes is more valuable than her daily energy drink.
Who had Laila? What did you have for Specific? Measurable? Attainable? Realistic? Time Bound?
Laila has determined that the opportunity cost of buying new basketball shoes is more valuable than her daily energy drink.
Laila will purchase new basketball shoes before basketball season starts in two months.

23. Show Me the Goal!
Specific
Measurable
Attainable
Realistic
Time Bound
The following goals do not contain all elements of a successful SMART goal
Identify the missing SMART goal element(s) for each
Hand out each of the SMART letters to your group. Some people might have to be in charge of two. Work together to figure out what is missing and try to be the first group to hold up the missing letter. The team with the most points will receive a prize.

24. Show Me the Goal! Specific Measurable Attainable Realistic Time Bound
I plan to save $1,500 to buy a used car. I will do this by canceling my home cable service and saving that $75 each month instead.
What is missing?
Time Bound!
Timebound
Why?
How long it will take to reach this goal has not been identified

25. Show Me the Goal! Specific Measurable Attainable Realistic Time Bound
I plan to save $2,500 by automatically depositing $105 from my paycheck into a savings account each month for 2 years.
What is missing?
Specific!
specific
Why?
What the person is saving money for has not been identified

26. Show Me the Goal! Specific Measurable Attainable Realistic Time Bound
I plan to save $5,000 for college living expenses in four years.
What is missing?
Attainable and Realistic!
This one has two. Attainable and realistic
Why?
How the goal will be reached has not been identified
Because of that, it isn’t possible to tell if the goal is realistic or not

27. Show Me the Goal! Specific Measurable Attainable Realistic Time Bound
Instead of signing up for a cell phone plan, I will save that money to buy a new computer in one year. I will do this by saving the $50 I would have spent on the cell phone bill every month.
What is missing?
Measurable!
measurable
Why?
The amount of the computer has not been identified

28. Once you write a goal, how can you ensure that you reach it?
Continually evaluate your goals
What will you do if something gets in the way of reaching your goal?
Make your goals public
Ask a friend or family member to hold you accountable
Use a goal setting website
Reward yourself for reaching your goal
Once a SMART goal has been written, the work doesn’t end. Managing and monitoring goal progress to ensure success is one of the most important parts of goal setting.
Sharing goal on facebook or twitter. What would be an example of a goal setting website?

29. Help Paul reach his goal
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…
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
Check your goal. Is it S M A R T? Paul will save $25 per month for the next four months in order to purchase the new cell phone that costs $100. Paul will add no additional money to savings during this time, and he is willing to give this up in order to purchase the new phone.

30. Life Happens…
Unexpected events = chance cards 1. Choose one: Have one person from your group scan a QR code or come up to get a card from me. 1 2 3 4
A newer, more expensive cell phone is announced that costs $150. Paul has decided that he would rather purchase the new phone.
Paul had to purchase $35 worth of supplies to complete a final project for one of his classes.
Paul misses a shift at work, which decreases his paycheck by $30.
Paul’s car needed a minor repair that cost $50.
1: How did you adjust Paul’s goal to come up with an additional $50? Will it take him longer to purchase the more expensive cell phone?
2: Did you have to use money from savings? Did you make sure to meet Paul’s goal to have a minimum of $100 in savings? What would you have done if you didn’t have savings?
3 and 4: Did Paul give up some of his entertainment expenses in order to stick to his goal? Or, did he extend the time to reach his goal?
Adjust Paul’s goal to make sure he is still successful at reaching his goal!

31. Was it hard to reevaluate Paul’s goal to adapt to life changes?
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?

32. Summary How can goal setting benefit you? What is a goal?
Why is setting financial goals important?
What are the elements of a SMART goal?

33. Now it’s your turn! 1. 2. 3.
Write one SMART financial goal for yourself using your worksheet. This is due tomorrow.
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