Financial Responsibility and Money Management
Responsible personal finance decisions are based upon reliable information and used to reach personal goals.
13. Financial decision making involves considering alternatives by examining costs and benefits.
Establishing personal goals often involves evaluating alternative choices. When these goals include financial decision-making, individuals need to examine costs and benefits.
Most financial decisions involve tradeoffs because resources are limited. Those decisions result in an opportunity cost.
If a teenager wants to buy a car, he or she needs to consider the costs and benefits. Can he or she afford the car? Will employment to earn money for the purchase take away from time for study or extracurricular activities? Would money earned be best saved for another goal?
Expectations for Learning
Explain how financial decision making involves considering alternatives by examining costs and benefits.