Needs vs.

Wants Name: Subject: Semester: Todd McLauchlin Personal Finance 30 Winter 2014 Date: Grade: Lesson Length: TBD 12 60 min

Content Identification: The first section of today's class will be dedicated to the completion of the simple budget from last period. I am budgeting an additional 15-20 minutes of time for the exercise completion. Once the students have submitted their simple budget, we will move on to needs versus wants and short/long term goals. The two topics are intimately connected, and therefore will be covered together. I will first go through an explanation of the needs, wants, short-term and long-term goals, which is attached at the end of this document. Following that, students will be given 3 scenarios where they will need to assess the needs and wants of the situation and come up with a short/long term goal(s) for the individual. This exercise will take roughly 15 minutes (approximately 5 minutes to create a group for each scenario). The groups will be 3-4 members; anything larger will result in members not getting a chance to contribute. To start the following class, we will discuss the scenarios as a large group. Outcomes (Objectives): Indicators (Assessment): a. Describe budgeting and explain how it relates PF(L) 5-Demonstrate understanding of personal to financial problem solving and financial budgets and their importance for financial responsibility. planning. d. Explain considerations that must be made when developing a budget, e.g., income, prioritizing, recurring and unexpected expenses and use them to help prioritize personal and financial goals. The students will create a simple budget, which will allow them to be able to express their knowledge of budgeting, fixed and variable expenses, and required and optional expenses. The students will be able to set a goal for a person, given a financial scenario. The students will be able to explain the difference between needs and wants. The simple budget and the group scenarios will serve as formative assessments for the unit material thus far. Common Essential Learnings: Personal and Social Values and Skills Critical and Creative Thinking Cross-Curricular Competencies: Developing Identity and Interdependence Developing Thinking Prerequisite Learning: An understanding of the budgeting terms and concepts, as well as, the layout of a budget will be required. Equipment/Materials: The simple budget data, the 3 scenarios for the group assignment, as well as, computer/internet access and Google Drive access will be required.

Set: (20 min + 15 min ) 1) The first portion of the class will be dedicated to completing the simple budget from last class. If the students do not need this time, it can be easily repurposed for the scenario discussion. However, it is most likely they will need the extra 15 minutes. 2) I will then move into an explanation of needs, wants, long-term and short-term goals, giving brief examples to help illustrate the concepts. This information is critical to the completion of the scenario exercise. These terms will be available on the student portion of the class webpage and are also included at the end of this document. Development: (25 min) 1) I will break the class into groups, since this is the first true group work of the class, (the previous pairs were virtual) I will ask them to select their groups; however, I will invite them to select different groups each time, so we can get a better sharing of knowledge across the room. 2) The students will be provided 3 scenarios (the same 3 to each group) and ask to discuss the needs and wants of the scenario. They will then come up with a short/long-term goals for each scenario. (Each scenario should take no more than 5 minutes to complete). These scenarios will be shared with the students through Google Drive and since we have a paperless classroom, they will be completed virtually. A copy of the scenarios will also be available on the student portion of the class webpage. (20 min) Closure: (2 min) 1) I will inform the class that these scenarios will be the basis of a class discussion to start the next class and each group will get to share at least one of their scenarios. Needs: Needs are the basics of life that you must have to survive, and are often called the essentials. Food, housing, clothing, water are the standard needs. Additionally, some expenses that relate to your job are also needs, such as transportation to and from work, a mode of communication (cell phone), or possibly even a computer/printer depending on your area of work. These items are the ones you cannot live without or earn income without. Wants: Wants are things that you would like to have. Wants are not absolutely necessary, but they may be a good thing to have. An example is a cell phone. Many will argue that a cell phone is something that you cannot live without in modern society; however, unless you require the cell phone to communicate for your job, it is a want. A person must eat, making this a need; however, a person does not have to be entertained, making movies and music a want. There is nothing wrong with wants, but they are the things that can be cut to save money and to help achieve goals. Short-term goal: A short-term goal is a goal that is attainable within a few weeks, or maybe a few months, and is typically small in scale. Short-term financial goals may relate to spending, creating a reduction in a certain area of spending by a specific date. They may also relate to savings, saving a certain amount of money by a certain date. With short-term goals, they are the most effective when they are small, but they can be part of a larger, long-term goal. Long-term goal: Long-term goals are the goals that you will obtain over a long period of time, typically a year or more. Examples, including saving for a car, saving for school, planning for a vacation, reducing a large debt, buying a home, retiring, etc. The long-term goals are often more meaningful and important than short-term goals, since they are the actual target we are trying to hit or achieve. The problem with long-term goals is that they are often far in the future, and we have trouble visualizing them. For this

reason, we create short-term goals that help built towards or enable our long-term goal. An example is, the long-term goal is to buy a car, but the short-term goal is to place 200$ in a savings account each month. The savings account can help purchase the car, but it is immediate and can help us better connect with the distant goal of buying a car. Goals: All goals are more likely to be achieved if they are specific, that is if you define exactly what your goal is (Ex: Save 4000$ over the course of a year). They should also be something that you can measure, saying you want to reduce debt is fine, but saying you want to reduce your debt by 25% in 3 months is something you can measure. The goals should also be attainable, if they are too high then you will fall short, making it unlikely you will stick with the goal program. They should not be too simple either, as you do want to make financial progress after all. It should also be connected to what you are actually concerned with, that is they should be relevant, while losing 15 pounds might be a great goal, it is not really a relevant financial goal. Finally, the goals should be time bound, meaning you should set a target time for your goal. It is great to a say you plan to put 900$ in your TFSA, but it is far more effective to say you plan to put 900$ into your TFSA in the next 3 months. In this sense goals can be defined as: S - Specific M - Measurable A - Attainable R - Relevant T - Time Bound