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Step 3: Creating a Plan

What did your learn from your personal spending log? Is the amount you need to save each week more than you receive?

Financial planning requires you to make decisions. Making decisions about money can be challenging because there are many things to consider. Your mood, values, culture, habits, and the influence of friends and parents can affect your decisions.

  Step 1:  Goals  
  Step 2: Analyzing the Plan  
  Step 4: Implement  
  Step 5: Monitor/Modify  
       
       
       
      Making Decisions  
         
There are six stages to making decisions. As an example let's assume that you want to go out to dinner with friends.
         
     

1. Identify Your Goal.

You want to eat dinner, you're hungry.

 
     

 

 
     

2. Establish Your Criteria.

Consider what type of food you want to eat, how much you want to spend on dinner, fast food or a sit down restaurant. By identifying your expectations in advance, you can eliminate choices that don't meet your wants and needs.

 
       
     

3. Examine Your Options.

Think about whether you want to eat now or later, maybe you will eat at home with friends instead of eating out. You want to eat Chinese food, are there any Chinese food resaurants close by?

 
       
     

4. Weigh the Pros and Cons.

Do your options meet your criteria? You are starving and you don't want to wait to eat.

 
       
     

5. Make Your Decision.

Decide which option best meets your criteria. I'm hungry, I want to eat now and I don't want to spend a lot of money so I will choose the fast food restaurant closest to me.

 
       
     

6. Evaluate the Results.

Talk with your friends about whether you liked dinner.

 
       
    Now It's Your Turn  
       
      Using the worksheet below and the decision making process, think of a decision that you need to make to reach your intermediate financial goal, show how the decision making model can be used to help you make a decision that will best fit your needs and your limited resources.  
       
    Decisions, Decisions Worksheet  
       
    Step 4: Implementing the Plan  
       
  Financial Planning