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Decision Making Magic
Good decisions lead to the
achievement of goals & a feeling of
self-control & self confidence
Good d...
Decision Making Magic
Following logical steps when making
decisions helps individuals make
informed choices
When decisions...
© Family Economics & Financial Education – January 2006 – Get Ready to Take Charge of Your Finances – Decision Making Magi...
© Family Economics & Financial Education – January 2006 – Get Ready to Take Charge of Your Finances – Decision Making Magi...
© Family Economics & Financial Education – January 2006 – Get Ready to Take Charge of Your Finances – Decision Making Magi...
© Family Economics & Financial Education – January 2006 – Get Ready to Take Charge of Your Finances – Decision Making Magi...
© Family Economics & Financial Education – January 2006 – Get Ready to Take Charge of Your Finances – Decision Making Magi...
© Family Economics & Financial Education – January 2006 – Get Ready to Take Charge of Your Finances – Decision Making Magi...
© Family Economics & Financial Education – January 2006 – Get Ready to Take Charge of Your Finances – Decision Making Magi...
© Family Economics & Financial Education – January 2006 – Get Ready to Take Charge of Your Finances – Decision Making Magi...
Factors
that affect financial
decisions
FACTORS THAT AFFECT FINANCIAL
DECISIONS
Family factors
Cultural factors
Social factors
Societal and
demographic factor...
Family factors
Family structure
Income level
Lifestyle
Size
Age
Stage of life cycle
Health status
Emergencies
Cultural factors
Cultural - related to the
traditions, beliefs, roles, & communication
styles of a group
Cultural and et...
Social factors
Education level
Family structure
Immigration
Ethnicity
Rural, urban, suburban
community
Peer pressure...
Societal and demographic
factors Demography is the
statistical characteristics of a
population
Age
Sex
Race
Birth, ma...
Economic factors
Employment rate
Kind and number of jobs available
Inflation
A period of rapid increase in the price o...
Technology
The use of mechanical or
electronic devices to manipulate
Information (Ie. Computers,
Ipads, Fax machines, fi...
The Media
Media
Communications that reach large
audiences with the aid of publication
devices that include
 Internet
 ...
The Marketplace
Supply
Goods and services available to
the consumer
Demand
Consumer desire to purchase as
compared to ...
Legal and moral factors
Laws that impact spending
Taxation
Investment and Retirement
Accounts
Insurance requirements
...
Personal factors
Needs
 Items to survive – food, clothing, & shelter
Wants
 Not essential but desirable – cell phone, ...
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1.02 factors affecting financial decisions burns

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Transcript of "1.02 factors affecting financial decisions burns"

  1. 1. Decision Making Magic Good decisions lead to the achievement of goals & a feeling of self-control & self confidence Good decisions are a key to successful independent living
  2. 2. Decision Making Magic Following logical steps when making decisions helps individuals make informed choices When decisions are made from habit or on impulse, there is a greater likelihood of negative outcomes
  3. 3. © Family Economics & Financial Education – January 2006 – Get Ready to Take Charge of Your Finances – Decision Making Magic – Slide 3 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 2.5.1.G1 Financial Decisions • Impacts an individual’s or family’s well-being o Well-being is the state of being happy, healthy, and prosperous • For example… o Saving for a family vacation o Spending money wisely o Purchasing new items
  4. 4. © Family Economics & Financial Education – January 2006 – Get Ready to Take Charge of Your Finances – Decision Making Magic – Slide 4 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 2.5.1.G1 Decision Making Process • It guides individuals to think through all components of making a good decision • STEPS: 1. Identify the problem 2. Identify resources & gather information 3. Identify the options (alternatives) 4. Identify the pros & cons of each option 5. Put the decision into action - Decide 6. Evaluate the outcomes of the decision
  5. 5. © Family Economics & Financial Education – January 2006 – Get Ready to Take Charge of Your Finances – Decision Making Magic – Slide 5 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 2.5.1.G1 Steps 1. Identify the decision to be made o Know the problem or question before searching for an answer Which car should I buy?
  6. 6. © Family Economics & Financial Education – January 2006 – Get Ready to Take Charge of Your Finances – Decision Making Magic – Slide 6 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 2.5.1.G1 Steps 2. Identify resources & gather information Search and compare information related to the decision $30,000 $10,000
  7. 7. © Family Economics & Financial Education – January 2006 – Get Ready to Take Charge of Your Finances – Decision Making Magic – Slide 7 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 2.5.1.G1 Steps 3. Identify the options (alternatives) • Loans • New vs. Used • Gas Mileage
  8. 8. © Family Economics & Financial Education – January 2006 – Get Ready to Take Charge of Your Finances – Decision Making Magic – Slide 8 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 2.5.1.G1 Steps 4. Identify the pros & cons of each option A reason in favor of an option: a potential benefit A reason in opposition to an option; a potential limitation or weakness
  9. 9. © Family Economics & Financial Education – January 2006 – Get Ready to Take Charge of Your Finances – Decision Making Magic – Slide 9 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 2.5.1.G1 Steps Continued 5. Choose the best option o Make the best choice after thinking about all of the consequences 6. Put the decision into action 7. Evaluate the outcomes of the decision o This will help you make better decisions in the future
  10. 10. © Family Economics & Financial Education – January 2006 – Get Ready to Take Charge of Your Finances – Decision Making Magic – Slide 10 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 2.5.1.G1 Benefits of Good Decision Making • When decision making skills improve, quality of life is enhanced • Making better choices to your decisions results in better use of time, money and other resources
  11. 11. Factors that affect financial decisions
  12. 12. FACTORS THAT AFFECT FINANCIAL DECISIONS Family factors Cultural factors Social factors Societal and demographic factors Economic factors Technology The media The marketplace Legal and moral factors Personal factors
  13. 13. Family factors Family structure Income level Lifestyle Size Age Stage of life cycle Health status Emergencies
  14. 14. Cultural factors Cultural - related to the traditions, beliefs, roles, & communication styles of a group Cultural and ethnic groups impact Values – fundamental beliefs or practices about what is desirable, worthwhile, & important Beliefs Lifestyle Family structures Clothing choices
  15. 15. Social factors Education level Family structure Immigration Ethnicity Rural, urban, suburban community Peer pressure Community relationships and involvement
  16. 16. Societal and demographic factors Demography is the statistical characteristics of a population Age Sex Race Birth, marriage, death rates
  17. 17. 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 Government Regulations Fiscal policies affect personal & business spending
  18. 18. Technology The use of mechanical or electronic devices to manipulate Information (Ie. Computers, Ipads, Fax machines, fiber optics, GPS systems) Objects (i.e Robots, automated assembly lines, hybrid cars) On going change impacts Training needs Replacing obsolete technology Types of jobs available
  19. 19. The Media Media Communications that reach large audiences with the aid of publication devices that include  Internet  Television  Voice, text, & data transmissions  Publications Impacts the ways people and businesses communicate and operate locally, nationally, and globally.
  20. 20. 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
  21. 21. 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 Service
  22. 22. 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 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
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