1. Essential Standard 1.00:
Understand economic activities of
individuals and families.
Objective 1.02
Understand characteristics of financial
goals, steps in decision making and
factors that affect financial decisions.

2. Essential Questions
 What are the steps in goal
setting and decision making?
 How do individuals needs,
wants, values, standards, and
priorities affect financial goals
and decisions?

3. FINANCIAL GOALS
 Financial Goals
 Financial goals should be SMART:
are  Specific
accomplished  Measurable
through and give  Attainable
direction to  Realistic
financial  Time-bound
planning.
 Learning to set
financial goals is
an important part
of learning to live

4. Decision Making
Steps
4. Identify the pros and
1. Identify the problem & cons of each option
decision to be made 5. Choose the best
2. Identify resources and option
gather information 6. Put the decision into
3. Identify the options action..just do it!
(alternatives) 7. Evaluate the
*team members outcomes of the
brainstorm decision

5. Six Steps in Economic
Decision- Making Process
Do the Positives (+)
outweigh the Negatives
(-)?
+
Disadvantages
Advantages
Use T-account to determine positives and negatives
Good Decision/Bad Decision
5

6. Good Decision Making
 Following logical  Good decisions lead
steps when making to the achievement
decisions helps of goals and a feeling
individuals make of self-control and
informed choices. self-confidence.
 When decisions are  Good decisions are a
made from habit or on key to successful
impulse, there is a independent living.
greater likelihood of  Who makes those
negative outcomes. decisions?
 Be sure YOU are
making the best
decisions!

7. FACTORS THAT AFFECT FINANCIAL
DECISIONS
 Family factors  Technology
 Cultural factors  The media
 Social factors  The marketplace
 Societal and  Legal and moral
demographic factors factors
 Economic factors  Personal factors
 Steps in Decision Making

8. Personal Factors Breakdown
 Needs and wants
 Distinguishing wants from needs helps individuals and
families set more realistic goals and make better
decisions.
 Values
 Understanding and prioritizing values helps individuals
and families set goals and make decisions that lead to
greater personal satisfaction.
 Standards --- Measures of quality or excellence
 With regard to standards for success, individuals have
different views of what it means to be successful.
 Priorities
 Each individual or family needs to set priorities by
deciding what is more important at any point in time.

9. Principles of Financial Planning
from the Jump$tart Coalition Classify the 12
 Money doubles by the “Rule of 72”
 Your credit past is your credit future
 Start saving young
 Stay insured
 Budget your money
 Don’t borrow what you can’t repay
 Map your financial future
 Don’t expect something for nothing
 High returns equal high risks
 Know your take-home pay
 Compare interest rates
 Pay yourself first
http://www.jumpstartcoalition.org/files2010/2010_J$_Cale
ndar.pdf

10. Factors Affecting
Decisions
 Family structure
 Income level
 Lifestyle
 Size
 Age
 Stage of life cycle
 Health status
 Emergencies

11. Cultural factors
 Cultural and ethnic groups impact
 Values
 Beliefs
 Lifestyle
 Family structures
 Clothing choices
 What are the advantages and disadvantages of
cultural diversity within a family, a school, a
workplace, a community?

12. Social factors
 Education level
 Family structure
 Immigration
 Ethnicity
 Rural, urban, suburban community
 Peer pressure
 Community relationships and involvement

13. Societal and Demographic
Factors
 Demography is the statistical characteristics of a
population
 Age
 Sex
 Race
 Birth, marriage, death rates
 Where people live

14. Economic Factors
 Employment rate
 Kind and number of jobs available
 Inflation
 A period of rapid increase in the price of goods and
services
 Recession
 An extended period of slow economic growth *
Review the Business Cycle-prosperity, recession,
depression, recovery
 Government Regulations & Spending
 Fiscal policies affect personal & business spending
Cash for clunkers, stimulus $, tax rates

15. Technology
 The use of mechanical or electronic devices to
manipulate
 Information (Computers, Ipads, Fax machines, fiber
optics, GPS systems, smart phones)
 Objects (i.e Robots, automated assembly lines,
hybrid cars)
 On going change impacts
 Training needs
 Replacing obsolete technology
 Types of jobs available

16. The Media
 Impacts the ways people and businesses
communicate and operate locally, nationally,
and globally.
 Communications that reach large audiences
with the aid of publication devices that include
 Internet
 Television
 Voice, text, & data transmissions
 Publications

17. The Marketplace
 Supply
 Goods and services available to the consumer
 Demand
 Consumer desire to purchase as compared to
availability
 Market response
 How quickly the market adjusts to supply versus
demand

18. Legal and Moral Factors
 Laws that impact spending
 Taxation
 Investment and Retirement Accounts
 Insurance requirements
 Beliefs in what is right and wrong
 What is appropriate behavior of employers,
employees, and individuals at home, work, and
within the community.
 Charitable Giving and Community Service

19. Personal Factors
 Needs
 Items to survive – food, clothing, & shelter
 Wants
 Not essential but desirable – cell phone, Music
CDs,
 Values
 A person’s belief about what is important and
desirable