1
NAME: _________________________________________ DATE: __________________ CLASS: _______
Standard 1: Decision Making and Goals
Students will use a rational decision-making process to set and implement financial goals.
Objective 1
 Explain how goals, decision-making, and planning affect personal financial choices and
behaviors.
 Discuss personal values that affect financial choices (e.g., home ownership, work ethic,
charity, civic virtue).
 Explain the components of a financial plan (e.g., goals, net worth statement, budget, income
and expense record, an insurance plan, a saving and investing plan).
 Compare short-term and long-term financial goals.
 Design a plan to reach a specific financial goal.
 List advantages of designing and following a personal financial plan.
Objective 2
 Analyze the role of cultural, social, and emotional influences on financial behavior.
 Explain how limited financial resources affect the choices people make.
 Describe the influence of peer pressure as it relates to purchasing decisions (e.g., fashion,
acceptance from others, and need for latest gadget).
 Explain how scarcity relates to needs and wants.
 Analyze the impact of marketing, advertising, and sales strategies/techniques on purchasing
decisions (e.g., impulse buying, delayed payment).
 Evaluate the role of emotions when making financial decisions.
Objective 3
 Relate financial decisions to personal and societal consequences.
 Recognize that individuals are responsible for their finances.
 Describe consequences of excessive debt (e.g., increased consumer costs, inflation, and
family instability).
 Describe the social and economic consequences of bankruptcy.
2
STANDARD 1 STARTER
STANDARD 1
OBJECTIVE 1
1. An example of a long-term goal would be:
A.A family vacation
B. Buying a used car
C. Purchasing a stereo
D. Saving for retirement
STANDARD 1
OBJECTIVE 2-3
1. Values, peers, family, feelings, and habits can influence:
A.Education
B.Relationships
C.Financial decisions
D.None of the above
2. An example of a clearly written financial goal would be:
A. “To pay off credit card bills by 2015.”
B. “To save money for college for the next five years.”
C. “To invest in an international mutual fund for retirement.”
D. “To establish an emergency fund of $4,000 in 18 months.”
2. Scarcity is an economic principle stating that because of _______________________,
an economic system cannot possibly produce all the goods and services
that people want.
A.Limited Resources
B.Spending habits
C.Low income
D.Excessive debt
3. What element is missing from the following financial goal?
“I will save $75 each week to go on a vacation to Hawaii.”
A. Time bound
B.Realistic
C.Attainable
D.Specific
4. Which of the following are components of a financial plan?
A.Checkbooks, saving, and investment plans
B.Balance sheet, tax deductions, and savings plan
C.Budget, bank statement, and net worth statement
D.Goals, net worth statement, and investment plan
5. What is a personal value?
A.Something thought to be a necessity or essential items required for life.
B.Something unnecessary but desired or items which increase the quality of
living.
C.A fundamental belief or practice about what is desirable, worthwhile, and
important to an individual.
D.The end result of something a person intends to acquire, achieve, do,
reach, or accomplish in the near or distant future.
6. An individual’s financial plan will vary depending upon one’s
A.Financial goals
B.Values
C.Lifestyle conditions
D.All of the above
7. Which of the following is NOT a consideration in decision making?
A.List alternative
B.Evaluate alternatives
C.Decide how much you really want it
D.Define the problem
8. What is the purpose of goal setting in the financial planning process?
A.To facilitate decision making
B.To provide direction for planning and action
C.To clarify goal ranges
D.To differentiate between needs and wants
9. SMART goals are:
A.Spontaneous, markable, already done, random, and testy
B.Specific, movable, achievable, reliable, and too hard
C.Specific, measurable, attainable, realistic, and time bound
D.Sincere, measurable, artistic, realistic, and timely
10. Marcus set a goal to buy a car in the next few months. He plans to make a $2500
down payment and has already saved $1300. If he can save $150 each
month for this goal to buy a car, how long will it take him to save the entire
$2500?
A.6 months
B.8 months
C.10 months
D.12 months
3. Sarah bought the latest jeans because her friends said she saw them in a magazine.
What influenced Sarah’s decision?
A.Her budget
B.Peer pressure
C.Debt to income ratio
D.Advertising
4. Encouraging customers to delay payment on a purchase to get a sale price is an
example of:
A.Advertising
B.Economics
C.Poor choices
D.Sales strategy
5. A practical reason to make an expensive purchase would be:
A.Peer pressure
B.Need
C.Impulse
D.Emotions
6. Once I have ranked my priorities and am working towards them, is it a bad thing to
change my mind?
A.No. In fact your priorities are likely to change over time anyway, and you
should prepare for that.
B.Probably, because you will undermine your savings discipline and
jeopardize your ability to achieve your goals.
C.Not necessarily, but it does mean that most of what you have done to
date will be in vain.
D.Not necessarily, but it does mean that the money you have saved
towards your goal will be wasted.
7. Which of the following is considered a need?
A.A new car
B.A place to sleep
C.A steak dinner
D.Business clothes
8. Which of these is NOT a consequence of declaring bankruptcy?
A.Increased sense of self-confidence
B.Family disruption & instability
C.Not able to obtain loans/credit for 5-10 years
D.Inflation of prices for other consumers
9. Which type of bankruptcy allows consumers to reorganize their debt and continue
paying their creditors?
A.Chapter 7
B.Chapter 10
C.Chapter 11
D.Chapter 13
10. What is NOT a financial consequence of debt?
A.Debt can be useful in times of emergency
B.Debt can lead to overspending
C.Debt obligates your future income
D.Debt can be expensive
3
Values, and Needs verses Wants
VALUES
Values strongly influence our __________________ ______________. We don’t usually spend our money on things we
do not feel are ________________. Typically, the more _____________ something is, the more we are willing to
______________ on it.

The ______________ and _________________ in your life that are very important to you.
•
NEEDS
•
–
Essentials…______________________________________________________________
–
Food
–
Clothing
–
______________________
WANTS
–
Simply _________________________ the quality of _____________________________
“Scarcity is an economic principle stating that because of limited resources, an economic system
_______________possibly produce all the goods and services that people ______________; therefore, choices must be
made about how the _______________ resources will be ________________.”
•
-Consumer Economics & Education, Glencoe, 2003
Hint: Good term to know!!!
For your “warm fuzzy/feel goods moment,” check out: http://www.values.com/inspirational-stories-tv-spots
4
Value Collage
A Collage About Me
Directions:
 Create a collage to represent personal values, goals, need and wants.
 The Collage can be made from the following materials: magazines, photographs, pictures, articles, writings, poems,
stories, quotes, drawings, cartoons.
 Construction paper will be provided, but you are welcome to think outside the box and use something
3Dimensional.
The collage should include the following elements. Each item has to be labeled as the intended element.
a. Full name
b. Five values
c. A personal short-tem goal
d. A personal long-term goal
e. Five wants
f. Five needs
On the back of the collage, write a short but correct sentence explaining each of the elements, answering the question
“Why?”.
Be creative; put some thought into this assignment. It is worth lots of points so make it neat and worth it. It is not
something that can just be thrown together. Remember to make is something that truly represents you.
Grading rubric:
Collage Arrangement:
Is the collage arranged in an exceptional way
that is eye catching to the viewer
_______/20
Content:
Collage answers all six elements
_______/50
Preparedness:
Student is prepared with the collage on the day assigned.
_______/10
Writing skills:
Collage is explained in a paper format with sentences
that are fluent and effective with very few errors in
mechanics, punctuation, and word usage.
_______/20
TOTAL: ________/100
5
Goal Setting Terms
1.
Long Term Goal–takes years to achieve. Gives a sense of direction.
(Happy Marriage, Being Educated)
2.
Intermediate Goals–stepping stone to long term goals
(Getting Married, Graduating from College)
3.
Short Term Goal–goals that can be reached within a year
(New Year’s Resolutions–get a date, pass your class)
4.
Incidental Goals–minor in importance, things you do every day.
(Flirt, go to class . . .)
If you can dream it you can achieve it . . .
The first step in financial planning is to set some financial goals. These goals should include the
following elements:
1.
Specific. State exactly what is to be done with the money involved.
Example: I plan to save for a down payment on a new car.
2.
Measurable. To make a goal measurable, write the exact dollar amount the goal is for.
Example: I plan to save $5,000 for a down payment on a new car.
3.
Attainable. To make a goal attainable, determine how the goal can be reached, which is often
determined by an individual’s budget.
Example: I plan to save $5,000 for a down payment on a new car by saving $200 from every pay
check.
4.
Be realistic. Do not set the goal for something unattainable or realistic. If a person is working
and barely meeting their immediate needs, saving $5,000 for a new car is not something they
can afford.
5.
Time Bound. To make the goal time bound, specifically state when the goal need to be
reached. This is influenced by how attainable the goal is. You would have to save for about 2 years to reach
$5,000.
Final Goal Statement: I plan to save $5,000 for a down payment on a new car by saving $200 from every
paycheck for two years.
Overhead:
What is Missing? 1. Attainable 2. Measurable 3. Specific 4. Time Bound 5. Realistic
6
Who affects our choices of what we buy?
Types of Influences

Cultural

______________________, the way someone is ___________________, geographic location

Social

Peer ___________________, fads, marketing, ___________________

Emotional

Binge ___________________, ___________________ shopping, fear of making a decision
Peer Pressure

The influence others have on an individual’s ___________________decisions.
List 5 Forms of Peer Pressure as it Relates to Purchasing Decisions:
List 5 Emotional Factors Related to Peer Pressure
Limited Financial Resources
Tommy is 17 and lives with his single mother who is unemployed. Tommy works at the video store after school and on
weekends to help her pay rent. Prom is in three weeks and he really wants to take his girlfriend. However, his paycheck
is barely enough to cover the necessities for him and his mother.
What are the sources of pressure that Tommy is feeling?
What would you advise Tommy to do?
What would you do?
7
Marketing, Advertising and Sales Strategies/Techniques
People who sell ___________________ and services are fishing for customers. They lure them in with sales,
coupons, and other enticements. Unlike fish, consumers can benefit in this situation – if they know how to take
advantage of special ___________________ opportunities.
Examples of Marketing, Advertising and Sales Strategies.

_______________________________

Holiday Sales

Coupons

_________________________________

Sweepstakes

_________________________________

Sales People

Attractive Décor

_________________________________

Items purchased most often are in _________________________of store (bread/milk)

Most __________________________items are given prominent positions
Opportunity Cost

Refers to what a person gives ___________________ when a decision is made.

This cost, often called a ___________________, may involve one or more of your resources:
 T___________________
 M___________________
 E___________________
Thinking Critically About Ads

In what ways is this ad trying to influence me? How is it trying to reach my emotions?

Am I being given all of the facts? What does the advertisement NOT tell me about the product?

What does the fine print say?

Does this advertisement sound too good to be true?

Where are ads found?
8
DECISION MAKING
Make a list of the decision you make in a typical week. Identify whether these decisions are:
Habitual Decisions
Daily Decisions
Long-term Decisions
(automatic decisions that require
little thought)
(decisions you make
(those that affect goals or future
choices)
every day)
1.
1.
1.
2.
2.
2.
3.
3.
3.
4.
4.
4.
5.
5.
5.
6.
6.
6.
7.
7.
7.
8.
8.
8.
9.
9.
9.
10.
10.
10.
Decisions-making Process:
1. Identify
2. Brainstorm
3. Explore
4. Act
5. Evaluate
9
NAME: ___________________________________________ DATE: ______________________ CLASS: _____________
Decision Making
Basic Economic Principles
People choose because of limited ____________________________.
People’s choices involve ____________________________________.
People respond to ________________ in predictable ways.
People _____________ economic systems that influence individual choices and incentives.
People gain when they trade _____________________________
People’s choices have consequences that lie in the future
The Decision-Making Process
Identify the _______________________
Gather information and list possible ____________________________
Consider __________________________ of each alternative
Select the best course of action
Evaluate the ___________________________
Factors that can Influence a Decision
A. Values

What is important to your family, others in your culture?

People you___________________

Pressure for positive or negative _________________________
B. Peers
C. Habits

You are accustomed to doing it this ___________________
D. Feelings (love, anger, frustration, ambivalence, rejection)

If you _________ make a certain decision

If you __________________make a certain decision
10
Family

Your family’s_______________________

Decisions other family members have made
F. Risks and consequences

What (or how much) you stand to _________________

What (or how much) you stand to _________________

Minor

Adult
G. Age
Common Decision-Making Strategies
Spontaneity

Choosing the first option that comes to mind; giving _________________ or no consideration to the
consequences of the choice.
Compliance

Going _________________ with family, school, work, or peer expectations.
Procrastination

Postponing thought and action until options are _________________.
Agonizing

Accumulating so much information that analyzing the options becomes _________________.
Intention

Choosing an option that will be both intellectually and emotionally _________________.
Desire

Choosing the option that might achieve the _________________result, regardless of the risk involved.
Avoidance

Choosing the option that is most likely to _________________ the worst possible result.
Security

Choosing the option that will bring some success, offend the fewest people, and pose the _________________
risk.
Synthesis

Choosing the option that has a good chance to _________________and which you like the _________________.
11
T-Chart
Think of a current decision you need to make, evaluate and complete the chart with the pros and cons.
Pros
Cons
Economic Influences on Decision-Making
Consumer prices
Changes in the _________________ power of the dollar, inflation
Consumer spending
Demand for _________________ and services
Gross domestic product (GDP)
Total value of goods and services produced within the _________________
Housing starts
The number of new homes being _________________
Interest rates
The cost of _________________ money
Money supply
Funds available for _________________ in the economy
12
Stock market index
(Such as the Dow Jones Averages, Standard & Poor’s 500)
Indicate general _________________ in the value of U.S. stocks
Unemployment
The number of people without ____________________ who are willing to work
Risks Associated with Decision-Making
Risks are associated with every decision. The following are common risks related to personal and financial decision
making:
Personal risks


Factors that may create a less than desirable situation. Personal risk may be in the form of
____________________, embarrassment, safety, or
Health concerns.
Inflation risk

Rising prices cause ____________________ buying power. Buying an item later may mean a higher price.
Interest-rate risk

Changing interest rates affect your costs (when borrowing) and your benefits (when saving or investing).
Income risk

Changing jobs or reduced____________________ by consumers can result in a lower income or loss of one’s
employment. Career changes or job loss can result in a lower income and reduced buying power.
Liquidity risk

Certain types of savings (certificates of deposit) and investments (real estate) may be difficult to convert to cash
quickly.
Opportunity Costs

Refers to what a person gives up when a decision is made. This cost, also called a ____________________, may
involve one or more of your resources (time, money, and effort).
Personal opportunity costs

May involve time, health, or energy. For example, time spent on studying usually means lost time for
____________________or working. However, this trade-off may be appropriate since your learning and grades
will likely ____________________
Financial opportunity costs

Involve ____________________ values of decisions made. For example, the purchase of an item with money
from your savings means you will no longer obtain interest on those funds.
13
Time Value of Money


Time value of money can be used to measure financial opportunity costs using interest ____________________.
For example: spending $1,000 from a savings account paying 4% a year means an opportunity cost of $40 in lost
interest.
Calculations:
Write out the equation:

Over 10 years, that $40 a year (saved at 4%) would have a value of $480 when taking into account
____________________interest.
Forms of Peer Pressure as it Relates to Purchasing
Decisions
Friends
____________________
Magazines
Telephone Directories
____________________
Commercials
Catalogs
Radio ____________________
Emotional Factors Related to Peer Pressure
____________________
Acceptance
____________________
Insecurities
Boyfriend/Girlfriend
____________________
Fear
Clubs
Athletics
____________________
Rich/Poor
Marketing, Advertising & Sales Strategies

People who sell products and ____________________ are fishing for customers.

They lure them in with sales, coupons, and other enticements. Unlike fish, consumers can benefit in this
situation – if they know how to take ____________________ of special purchasing opportunities.
14
Rudy
Values, Goals, Decision Making, & Financial Planning
Directions: Complete the following question while watching the movie “Rudy”.
1. Write two sentences that you feel define success. (2 points)
2. What was Rudy’s passion at the beginning of the movie (the only thing he wanted to do)?
How did he achieve it? ( 2 points)
3. What did Rudy value?(2 points)
4. What were Rudy’s three main goals? (1 point)
5. How did he achieve these goals?(2 points)
15
(Continued on the next page):
6. Review Essay: (3 paragraphs) What can you learn from this movie and how does it tie into
values, goals, and planning? (24 points)
16
Ode to the Zode
By Dr. Seuss
Did I ever tell you about the young Zode,
Who came to two signs at the fork in the road?
One said to Place One, and the other, Place Two.
So the Zode had to make up his mind what to do.
Well... the Zode scratched his head, and his chin and his pants
And he said to himself, "I'll be taking a chance
If I go to Place One. Now, that place may be hot!
And so, how do I know if I'll like it or not?
On the other hand though, I'll be sort of a fool
If I go to Place Two and find it too cool.
In that case I may catch a chill and turn blue!
So, maybe Place One is the best, not Place Two,
But then again, what if Place One is too high?
I may catch a terrible earache and die!
So Place Two may be best! On the other hand though...
What might happen to me if Place Two is too low?
I might get some very strange pain in my toe!
So Place One may be best," and he started to go.
Then he stopped, and he said, "On the other hand though...
On the other hand... other hand... other hand though..."
And for 36 hours and a half that poor Zode
made starts and made stops at the fork in the road.
Saying, "Don't take a chance. No! You may not be right,"
Then he got an idea that was wonderfully bright!
"Play safe!" cried the Zode. "I'll play safe. I'm no dunce!
I'll simply start out for both places at once!"
And that's how the Zode who would not take a chance
Got no place at all with a split in his pants.
17
NAME: _______________________________________________ CLASS: __________ DATE: __________
DECISIONS
1. What is Selena's goal?
2. What do you think Selena's criteria should be for selecting a family cellphone plan?
3. What are the best options for Selena if her phone carrier is [local provider]?
4. Identify the pros and cons of each option.
PROS
CONS
5. Decide which choice makes the most sense for Selena. If she asked you, what would you tell her to do?
6. What is a current decision that you are trying to make?
7. Make another pro/con list to help you decide:
PROS
CONS
18
NAME: _______________________________________ DATE: _______________ CLASS: __________
PRINTED ADS
As you look at printed advertisements, critically analyze them by asking the following.
1. What is the product being advertised?
2. In what ways is this ad trying to influence me?
3. How is it trying to reach my emotions?
4. Am I being given all of the facts?
5. What does the advertisement NOT tell me about the product?
6. What does the fine print say?
7. Does this advertisement sound too good to be true?
8. Where are ads found?
9. Who or what is the source/author/creator of this information?
10. What qualifications or credentials do the person OR group have?
11. Is the information up to date?
12. What is the purpose of the information: to educate, to entertain, or to
persuade you to buy something?
13. Is there contact information?
14. What is the ad technique?
15. Would you purchase this product based on this ad?
19
SLOGANS IN THE MEDIA
Who said it?
1. Breakfast of Champions:
2. Eat Fresh:
3. Eat Mor Chikin!
4. Every kiss begins with_______
5. Give me a break, give me a break; break me off a piece of that _____ _____ _____
6. Get the door, it's ____________
7. Got _________?
8. I'm lovin' it:
9. If it doesn't get all over the place, it doesn't belong in your face:
10. It's finger lickin' good:
11. Just Do It:
12. Like a good neighbor, __________ _____________ is there.
13. Think outside the bun:
14. M'm! M'm! Good!
15. Maybe she's born with it. Maybe it's ______________________
16. Melts in your mouth, not in your hands:
17. More saving. More doing:
18. It keeps going and going and going:
19. Obey your thirst:
20. So easy a caveman can do it:
21. Sometimes you feel like a nut, sometimes you don't:
22. There's always room for __________
23. Where a kid can be a kid:
24. You're in good hands with _________________
25. The greatest fun spot you’ll ever know:
26. Anytime is ___________
27. It’s what fun is!
28. Pop-pop, fiz-fiz, oh what a relief it is!
29. The happiest place on earth!
30. Life elevated:
20
BANKRUPTCY
Bankruptcy

A legal process to get out of __________________ when you can no longer make all your required
payment.
Reasons for Bankruptcy

__________________

Job Loss

__________________

Natural Disaster

Credit Card Debt
Debt

The entire amount of money a person owes to __________________.
Inflation

An increase in the price of goods and services. A dollar in the __________________ won’t buy as
much as a dollar today.
 Did you know…?
o
Inflation usually averages between _______ and ________ each year.
o
Inflation has influenced our __________________for decades ranging from .5% to 18%.
o
In 1971 a first class stamp cost 8 cents.
.
Bankruptcy Basics

Chapter 7
o
LIQUIDATION

__________________ out all __________________ debts and allows certain personal
property exemptions.

Chapter 13
o
REORGANIZATON

Is a court-approved __________________ plan.
21
Consequences of Bankruptcy

Influences financial __________________

__________________ choices

Pay __________________ for credit

Other __________________ absorb your debt
Changes to Bankruptcy Law

New law in effect October 17, 2005.

New __________________on personal bankruptcy.

Requires those filing to get counseling before they are allowed to file.

Bars filers with above-average income from filing Chapter 7 (liquidation).

New debt may not be discharged.

Quicker __________________process
Alternatives to Bankruptcy

Out of __________________settlement

__________________ of payments

Attaining help from consumer credit __________________

Payment of debts by __________________ or borrowing on property.
Things to Consider BEFORE Filing

A bankruptcy filing could determine whether or not you get a __________________

Your insurance rates could __________________

You may find it difficult to rent an apartment or __________________for a home loan.

Bankruptcies stay on your credit report for______ years.

Bankruptcy can __________________ your credit score.

Reduce your __________________

Talk with your creditors.

Talk with a nonprofit __________________ agency.

Talk with an attorney and understand the __________________ of declaring bankruptcy.

Consider __________________ carefully.
22
TIPS TO REMEMBER

Keep __________________of your daily expenses.

Save money on a regular __________________

Make changes right away if you see yourself starting to get into __________________ trouble.

Pay __________________ to your household finances, __________________ if you are married.