Planning and Decision-Making, Part I

Suggested Target Age: Grades 5-12

Topics Covered: Goal-setting, decision-making

Time Required: 45 minutes

What Will the Students Learn?

  • How to distinguish between needs and wants
  • How to identify short, intermediate, and long-range goals
  • How to articulate SMART goals (specific, measurable, attainable, realistic, time-bound)

State Contents Standards Key
California: History/Social Science: Principles of Economics 12.1.1-3;
Florida: SS.D.1.2, SS.D.1.1,
Indiana: none
Virginia: none

Materials Needed:

NOTE: This lesson does not require computers or Internet access.

Lesson Plan:

Opening activity (10 minutes)

1. Stand in front of the chalkboard/whiteboard or large sheet of paper on an easel with something to write with.
2. Ask the students to tell you something they spent money on in the past 48 hours. Write each of their responses on the board/paper. Make them be specific – e.g., if they say “food” – ask them what specifically (Hamburger at McDonalds? Candy bar? Lunch in the cafeteria? A Coke?) Write down at least 20 things. (If the students cannot give you twenty responses, then share some things that you personally have spent money on in the past two days. If you can, be sure to include some things that are clearly needs – such as your rent or electric bill.
3. Now go through each item on the list that you’ve written and ask the class to vote as to whether that expenditure represented a want or a need. (Needs would be things like: essential food (not candy or soda), medicine, bus fare to get to a job or other job-related transportation costs).

Main teaching (20-30 minutes)

1. State that the topic of today’s lesson is planning and decision-making and that through this first activity, they’ve just done one of the key steps in making good decisions – namely, being able to distinguish between wants and needs.

2. State that the IDA Club is especially about personal financial management, and when it comes to managing money, it’s especially important to know how to set goals and make wise decisions.

3. Explain that there are at least four key things to remember when thinking about decision-making:

  • Decision-making usually involves trade-offs. Ask them if they can define “trade-off.” When they arrive at a good definition, write Trade Offs on the board with a short definition (TRADE OFF = Sacrificing one option right now in order to achieve another.)
  • Decision-making usually has consequences for the future. Personal financial decisions made now will effect decisions made in the future. (For example, if you decide now not to save for college, then later, you may not be able to decide to attend college, but rather get a job to earn money to pay for schooling.)
  • Decisions we make often affect not only us but also others around us, and the world around us.
  • A person can become a good decision-maker through practice.

4. Pass out copies of the Decision Process Model to all students. Tell the students that today and next week you will be walking through this process in order to practice making plans and good decisions.

5. Planning is about setting goals and then thinking through how you’re going to accomplish those goals. Explain that one step in goal-setting is to estimate how long it will take to achieve the goal. Goals can be divided into three categories:

  • Short-term goals (take 0-3 months to achieve)
  • Intermediate goals (take 3-12 months to achieve)
  • Long-term goals (take longer than one year to achieve)

6. Class discussion: Mention the follow scenarios and have the students tell you whether they represent short (S), intermediate (I), or long term goals (L):

  • Save money to buy your best friend a birthday present next month (S)
  • Save money for the year-end class trip (I)
  • Save money to buy new tires for your car (L)
  • Buy a new phone to replace your damaged one (I)
  • Set aside money to pay for the first semester of college (L)

(Keep in mind that a student may be able to make a case for a different answer. For example, someone with a part-time job may be able to save sufficient money to purchase a new phone in two months, meaning that would be a short-term rather than intermediate goal.)

7. A second thing about goals is that you not only need to know how long it may take to achieve them, but you need to be able to make your goals very clear. Financial planners use a process to set clear goals that they call “SMART goals.” A SMART goal is:

  • Specific (e.g., “go to a professional basketball game for my birthday” versus “do something cool for my birthday”
  • Measurable (e.g, “save $50 for the ticket” versus “save a bunch of money”)
  • Attainable (e.g., your birthday is 3 months away which gives you time to save about $5 per week)
  • Realistic (e.g., saving $50 for the general admission ticket versus thinking you can buy a box seat)
  • Time-bound (“I need to have the money by May 15” gives you a specific date to work with)

Closing Activity (10 minutes)

Break into pairs. Pass out the SMART Goals Worksheet to each pair of students to work on together. They need to rewrite the goal to make it a SMART goal.