Goals and Budgeting

Ms. Rendek

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

HOW DO VALUES, NEEDS, WANTS AND GOALS RELATE TO FINANCIAL DECISIONS?

Decisions FinancialDecisions

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.

Today...

• Write your own SMART Goals

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?

Make a list...

• What is most desirable, worthwhile, and/or important to you as an individual?

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

Maslow’s Hierarchy of Needs

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

Budget Worksheet