Financial success and stability are dependent on good money management. You will be learning about the tools available to help you with that. But when it comes to money management, you still have to make many decisions. You’ll need to consider when to save and when to invest. You’ll need to consider when to loan or borrow money. You’ll need to consider what types of things to buy or invest in. It can be a little overwhelming, honestly. So, what factors must be considered when making financial decisions? Read each tab to find out!
One of the first things that a person must consider when it comes to financial decision making is what is a want and what is a need. Something classified as a want is something a person would like to have but doesn't have to have to survive. A need is something a person must have to survive and live life in the manner to which they are accustomed. An easy example is food. A human must have food to survive. That is a need. However, that human might want to eat an expensive steak. That is a want.
When making financial decisions, people must first consider what they need and how they will spend their money to get it. Some of these decisions are easy, but some get more complicated. See if you can determine how the scenario on each box exemplifies a need vs. want decision. Click the box to see if you are correct.
Another factor to consider when making financial decisions is what matters now and what will matter in the future. The decisions that you make now can have significant consequences for your financial future. In this course, you will learn about many different financial decisions that can be made now to support you in the future. For now, see what you know by answering the questions. Read the question on the left, think of how you would answer and then click on the question to compare your answer with the sample provided.
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There are so many things you can spend money on now that could support you in the future. They include various types of insurance, real estate (property), shares in a publicly traded company, or other investments. In this course, you will learn how and why these financial decisions can help you. |
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Save, save, save! If you save money now, you can use it in the future. There are many ways to save money, and knowing about them will benefit you. |
Luckily, humans have a built-in support system when it comes to making tough choices. A person’s financial decisions are often based on their values. A person’s values determine their behavior and their ethics. Ethics are moral principles or guidelines that determine what conduct is right or wrong for individuals or groups. Ethics provide a framework for understanding right and wrong regarding fairness, obligations, and benefits to society. Examples of ethical behavior include honesty, respect, fairness, and justice. Without ethics, there would be no regard for what is right, and everyone would do what they want.
But, of course, not everyone shares the same ethics. Feeling confident about what you value and how that impacts your ethics will help you make financial decisions that are good for you.
Here are some things that people take into account when allowing their ethics to guide their financial decision-making.
- Can I buy products from a company that supports my personal beliefs?
- Will my financial decision negatively impact other people, the economy, the world, or the environment?
- How can I spend my money in a way that benefits the organizations I support?
- What borrowing, lending, and investing decisions can I make that align with my values?
It's time to put it all together! Read the scenario presented in each question and determine which significant factors are being considered (needs vs. wants, present vs. future, or ethics) and how. After you have answered all three questions, click Next to compare your answer to the sample answer provided.
Vera just got paid! She is going to the video game store to get her copy of the new Zombie Takeover 3000 that came out last week. What words of advice might you offer to Vera?
Edwin really wants a new pair of sneakers. He set a price alert online for the pair he wants. They will be on sale in just a few weeks. Edwin has decided to wait to get his new shoes. What factor of financial decision-making is Edwin taking into account? Do you think he is making the right choice? Why?
Shana is buying new makeup. Her friend Alana told her that the company that makes Shana’s favorite product tests its makeup on animals. Shana loves animals and is really upset about this. She decides to find a new brand that doesn’t test on animals. What is guiding Shana’s choice?
| Your Responses | Sample Answers |
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It might be wise to remind Vera to consider her needs vs. wants before she spends money on a new video game. She might want it, but she doesn't need it. |
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Edwin is considering the present vs. the future. He knows he can save money on the shoes by waiting, which is probably the right choice for him. |
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Shana is letting her ethics guide her. She is choosing not to spend her money supporting a company that doesn't share her values. |
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