Good financial decisions lead to achieving goals and building self-confidence. Making decisions through logical steps and considering options helps avoid negative outcomes. Many factors influence financial decisions, including family, culture, society, economics, technology, media, laws, and personal priorities and values. Carefully evaluating these factors helps ensure financial decisions support well-being.

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. 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. © 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. © 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. © 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. © 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. © 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. © 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. © 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. © 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. Factors
that affect financial
decisions

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. Family factors
Family structure
Income level
Lifestyle
Size
Age
Stage of life cycle
Health status
Emergencies

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

16. Societal and demographic
factors Demography is the
statistical characteristics of a
population
Age
Sex
Race
Birth, marriage, death
rates

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. 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. 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. 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. 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. 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