Goals and Budgeting Ms. Rendek. The importance of setting goals and maintaining them...no matter how...
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Transcript of Goals and Budgeting Ms. Rendek. The importance of setting goals and maintaining them...no matter how...
The importance of setting goals and maintaining them...no matter how hard it may be.
• https://www.youtube.com/watch?v=Yo4WF3cSd9Q
WHAT IS A GOAL?
A goal is defined as the end result of something a person intends to acquire,
achieve, do, reach, or accomplish sometime in the near or distant future
Identifying goals makes decision making easier
TYPES OF GOALS
Goals
Financial goals are specific objectives to be accomplished through financial planning
Education goals enable individuals to prepare for future success in the workplace
Long-term goals are specified as more than one year
Short-term goals are specified as less than one year
SMART GOALS
SMART Goals
Specific
State exactly
what is to be done
Measurable
Include how the
goal can be measured
Attainable
Determine steps to
reach the goal
Realistic
Do not set goals for
something unrealistic
Time Bound
State when the goal
will be met
Financial and education goals should be SMART goals
SMART EDUCATIONAL GOAL• Goal – “I want to attend college.” Make is SMART
• Specific – I want to attend a four year college• Measurable – Because I want to attend a four year college, I will earn a
B in algebra• Attainable – Because I want to attend a four year college, I will earn a
B in algebra this semester• Realistic – 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• Time Bound – 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 in high school
SMART FINANCIAL GOAL
• Goal – I want to buy a new car – Make it SMART• Specific – I plan to save for a down payment on a new car• Measurable – I plan to save $5,000 for a down payment on a new car• Attainable – I plan to save $5,000 for a down payment on a new car by
saving $200 from every paycheck• Realistic – I will save $200 from each paycheck for a down payment on
a car since I usually waste the money on unnecessary items instead of saving it
• Time Bound – I plan to save $5,000 for a down payment on a new car by saving $200 from each paycheck for two years.
WHAT IS A VALUE?
•A value is a fundamental belief or practice about what is desirable, worthwhile, and important to an individual
Family
Good health
Financial security A successful
and/or satisfying career
Honesty
Helping others
Religious commitment
Education
What are examples of values?
VALUES
Religious affiliations
Family
Teachers
Friends
Law
MediaWork/Career
Life Experiences
Are your values the same as the person sitting next to you?
VALUES
Values guide a person’s needs, wants, and goals
Values, needs, wants, and goals influence a person’s daily decisions
Decisions affect an individual’s financial situation
NEEDS vs. WANTS
A need is something thought to be a
necessity or essential items required for life
Examples of needs:•Food•Water•Shelter
Examples of wants:•Car stereo•MP3 player•Designer clothes
A want is something unnecessary but
desired or items which increase the quality of
living
NEED OR WANT? YOU DECIDE!
•Clothing
•Going to the movies
•Going out to eat
•A place to live
•A car/truck
•Security
• A computer• Respect• Cell phone• Owning a vacation
home• Food• Social connections
Everyone has different interpretations of needs and wants.This is based on their personal values!
“Budget Busters”
• Give yourself five points if you currently have a budget.• Give yourself five points if you have a checkbook.• Deduct a point if you have ever bounced a check.• Deduct a point if you bought something this week without comparison
shopping.• Give yourself a point if you bought a store brand, rather than a name brand
item this week.• Give yourself five points if you have a savings account.• Give yourself five points if you added any money to your savings account this
week.• Give yourself five points if you have a method of recording what you spend.
Why Create a Budget?
Helps you determine where you are spending your money currently (and if there is any waste)
Helps you decide where to spend your money in the future.
Organized way to achieve SMART goalsPuts you in control of your financial future.
How do you currently spend your money?
• Make a list in your journal of your current income (where does the money you use come from? Is the amount consistent?) and what you typically spend your money on (and how much).
Pay Yourself First
• Set aside money for big ticket items• Avoid borrowing when you can (esp. when
there are high interest rates)
How to Build a Budget
1. Decide on a time frame for tracking expenses (week, two weeks, month).
2. List all money you have coming in (income).3. Make categories for all expenses. Consider
needs vs. wants. 4. Subtract total expenses from income.5. Study your budget and your financial plan to
make sure it fits with your plans and goals