Unit 1 - Money and Youth: Module 1, 2, 3

Factors influencing money decisions (8)

1. Emotions (your emotional response to the item)

2. Friends and Peers (peer pressure)

3. Customs, Traditions, and Habits (falling in line w/ past choices)

4. Family Members (how you think your family would react)

5. Latest Styles and Fads

6. Advertising

7. Incentives (sales, discount coupons, other things that further persuade you to buy an item)

8. Your Values and Confidence (knowing what you want based on your preferences and values)

Ways to make good money decisions (4)

1. “Think about your thinking”: Evaluate whether you are buying something because it reflects your values and brings you happiness or because you are trying to appease others or give yourself short term satisfaction.

2. Your “Opportunity Cost”: By spending money and time on something you don’t need, you may be sacrificing or prolonging your process of purchasing/acheiving the next best alternative (doesn’t have to be just money).

3. Future Trade-Offs: What are you giving up in the future by making this money decision?

4. Can you afford the cost? Consider your monthy bills, credit card balances, interest payments, debts, etc.

Distinction between opportunity cost and future trade-offs

Opp cost: What a person could’ve done w/ what was sacrificed (the next best thing)

Future trade-off: What is sacrificed to get something else (choice between two things)

“Money can’t buy happiness”

Money doesn’t GENERATE happiness: It facilitates it by helping you achieve your goals (a thriving family, meaningful material possessions, a successful business, etc). However, a LACK of money leads to numerous challenges such as poverty, stress, having to work long hours, being in debt, etc.

Purpose of having a financial plan

To maintain control of your money and track where and how you spend your money. A financial plan also outlines your goals and steps to achieve your goals. Goals are powerful incentives that encourage you to spend your money wisely, ensuring that you achieve short term and long term happiness and minimize the consequences of rash money decisions/financial instability (the less money you have, the more paramount it is to formulate a financial plan).

Carrying Cost of Debt

the interest charges that you pay on debts that you carry on a credit card over time.

Money can’t buy happiness but it plays an ______________________ role in our everyday lives.

important; we spend money, earn money, invest money, borrow money, etc

If you want to be in control, have a ______.

plan

Medium of Exchange

one of the roles of money. Prices can be set in terms of money for goods/services and then money can be used to “exchange” to receive a good/service.

Financial Planning

setting goals for things you hope to achieve and acquire over time and making a plan for how to achieve those goals.

When setting goals, consider:

time periods

Short term/medium term goals are ____________ _________ for your long term goals

stepping stones ( but short term are stepping stones for medium term goals and med term goals are step stones to long term goals)

Setting goals for yourself can be a __________________ ______________________ which can affect your decisions. 

powerful incentive

Goals help you strike a balance between:

the happiness you want to experience in the present day and the happiness you want to experience in the future → evaluate things that YOU find valuable and bring some form of meaningful satisfaction to your life.

Setting goals means to (4):

• know clearly what you want

• know the difference between what you need and what you want

• know the things you care most about

• know what you want to achieve and what will make you happy – today and in the future.

Track your progress to see if you are ___________________________ or want to change ___________

on the right track towards your long term goals; direction/methods

Influences on your values (five examples)

• Childhood experiences

• Friendships

• Work experiences

• Travel experiences

• Celebrities (rise of influencer culture)

Values

Things that make up your character. They represent what you think is important in life. They show up in your decisions, actions, and judgments.

Peer pressure

Refers to how other ppl your age

Why are values important in money decisions?

Your values determine what you find to be important in your life. You must identify and solidify your values so you won’t be influenced by external factors that could lead you to make money decisions that misalign with your character/hinder your efforts in achieving your goals.

Consider different points of views, views that can strengthen your values or provide better alternatives.

Others may influence you to adopt the same values that they have, and while those values might be good for them, they _______________…..

might not necessarily be good for you

How peer pressure obstructs your values and your ability to make sound decisions

It compels you to make decisions that are “out-of character” to “fit in” or uphold your social status. PP WOULD PUT YOUR VALUES TO THE TEST. You make countless difficult decisions during your formative adolescent years (what college you attend, the major you want to pursue, your career path, the classes you want to take, etc) as well as seemingly trivial ones that pile up on your psyche (the clothes you buy, the hobbies you pick up, the friends you surround yourself with, the clubs you join, etc)

Envy: keeping up with the joneses

You may have someone you envy and you want what they have, and see them as the ideal. Envy can cause you to make grand decisions that you may regret later down the road.

Main factors influencing your values (mostly negatively) (3)

1. Peer pressure (others are pressuring you)

2. Envy (you are pressuring yourself on the basis of others’ seemingly idyllic lives)

3. Advertising

Why advertising can be good (5)

• Evokes emotion

• Encourages competition

• Helps fund media productions trhough sponsors

• Some TV and radio programs are free due to ads

• Allows consumers to compare goods and services and make well-informed money decisions

Advertising techniques (9)

• Repetition (repeating a slogan/phrase)

• Conformity (aims to have you “get on board,” “be in,” “get with it”)

• Imitation (having a respected figure or a celebrity promote their products in hopes that you will imitate the celebrity)

• Emotional Appeal

• Good Will (giving you something for “free” in exchange for you buying something, or giving you a free sample)

• Scare tactics (ex. you don’t wanna SMELL BAD SO YOU SHOULD BUY THIS DEODORANT)

• Snob Appeal (only elites have this product)

• Economic Appeal (giving you a “great deal,” like having no interest)

• Comfort and Enjoyment (the ad puts their product in relation to something comforting but unrelated to the product)

Rights of a consumer (9)

the right to choice

• the right to consumer education

• the right to be informed

• the right to participate in marketplace decision making

• the right to safety

• the right to have access to basic services

• the right to be heard

• the right to a sustainable enviroment

• the right to redress

“Luck of the Draw”

The understanding that we are not born into equal circumstances; some have way more advantages than other and vice versa.

The Life Cycle

You goals and priorities of your fifteen y/o self (education, relationships, future career) would be very different from your 65 y/o self who is more concerned with retirement. Therefore, when setting goals you must consider the various stages of your life cycle.

Recognize that at some poin t in your life, you would have to __________________ with a _____________ (life cycle)

share assets; partner

Types of factors affecting decisions

• economic

• social (example: women in the workforce)

• political (government policies and regulations and affecting our general surroundings like infrastructure and police institutions) so go vote

• technological

ways the economy affects your decisions: (9)

• the rate of inflation

• the availability of jobs

• interest rates (affecting the cost of borrowing money or how much you can make on your savings) • the stock market, bond markets, etc. (affecting the returns that are possible on your investments)

• government programs (affecting benefits you may be able to receive)

• tax policies

• the status and strength of labour unions (affecting your income, benefits, and working conditions)

• what goes on in other countries (affecting jobs, incomes, and opportunities in Canada)

• the exchange rate for the Canadian dollar (affecting the cost of things we buy that are made in other countries)

technological factors (4)

• lead to loss of jobs for some and creates jobs for others

• it can affect the way we do banking, keep our records, and do our shopping.

• ready access to handheld devices (implications for financial recordkeeping)

• lines at supermarkets are shorter due to computerized transactions

  Chnaging the ways in which we approach financial decisions

Langauge and communication skills

people that have speech impairments/disabilities or aren’t fluent in englihs will have a harder time accessing financial opportunities than someone that is able to fully and effectively communicate with others living in Canada. being fluent in multiple languages would also be helpful.

Prejudice

making pre-judgements based on someone’s appearance/initial actions/other things they can’t control. different ppl face different challenges and prejudice is one of those challenges

Helping others

Recognize the ways you are fortunate and how your income level may be much higher than your counterparts. You can donate to charity or directly help people in your community. Hleping doesn’t mean just material assistance, but also offering compassion and listen and talk with people.

Taste and preferences

individual likes and dislikes

Employment insurance

a program which governments can use to help provide funds to people who become unemployed.

SMART stands for:

Specific, measurable, achievable, relevant, time-bound.

Types of scams (5)

• Requests for Personal Information:

• • Sending False Invoices: do not simply pay a received invoice. Check into it. Make sure it is legitimate.

• • Stealing Your Identity (to access your bank account or assets)

• health promotions

• subscription traps

• family member in distrress ( they lie and say that a family member is injured and needs money)