Decision Making Magic

1. Decision Making Magic Decisions: Definition, Types, Process and Benefits

2. What is a Decision? • A choice that is made about things that affect a person’s life • There are two types of decisions • Routine • Major

3. Routine Decisions • Are made on a day-to-day basis • Don’t require a lot of time to think through • They can even become a habit in daily life • For example, deciding… • What to wear in the morning • What to pack for lunch • Where to sit on the school bus

4. Major Decisions • Have long-term effects on a person’s life • Should be made very carefully and with a lot of thought • For example, deciding… • What type of car to buy • To attend college

5. Your Decisions • Think about some of the decisions you have made in the past week? • Are they routine or major decisions? • Share one of your decisions and explain whether it is a routine or major decision.

6. Financial Decisions • A type of major decision • Impacts an individual’s or family’s well-being • Well-being is the state of being happy, healthy, and prosperous • For example… • Saving for a family vacation • Spending money wisely • Purchasing new items

7. Decision Making Process • It guides individuals to think through all components of making a good decision • STEPS: 1. Identify the problem 2. List alternatives 3. State your Criteria 4. Evaluate your Alternatives 5. Make a decision and evaluate the results.

8. Steps • Identify the Problem • Know the problem or question before searching for an answer • List Alternatives • Brainstorm pros and cons for all of the possible choices

9. Steps Continued • State your Criteria • Determine what requirements are needed for you to make your decision. • Evaluate your alternatives • What are the pros and cons of your choices? This will help to narrow down your list. 5. Make a decision and evaluate the results. • This will help in making better decisions in the future

10. Practice • Read the problem on your worksheet • Work through each step of the decision making process • Share your responses

11. So Many Choices! • There are many different options to chose when making a decision • Every option has a different consequence

12. Benefits of Good Decision Making • When decision making skills improve, quality of life is enhanced • Making better choices to your decisions results in better use of time, money and other resources

13. Values • Values are fundamental beliefs or practices about what is desirable, worthwhile, and important • People have different values that influence the decisions they make • The decision-making process can be used to: • identify personal values • develop the best solution to a problem • Helps when making major decisions in your life

14. Everyone has different values Education Family Financial Security Honesty Helping others ?

15. Age Factors That AffectDecision Making Needs Wants What about you? Family Culture Time Society Motivation Money Values Education Habits Attitudes 1-J

16. Needs and Wants Wants– the desire for goods and services that can increase our quality of life but are not absolutely necessary for our survival Needs – goods or services that are required for survival

17. Why do needs and wants matter? Will help you decide what to spend and not spend your money on Opportunity cost – the value of the next best alternative that must be forgone as a result of a decision Use trade-offs and opportunity costs to help you make these decisions Trade-off - giving up one thing for another Is the trade-off to your decision a need or a want? What is the value (opportunity cost) of that trade-off to you?

18. Why is it important to understand what influences your decisions? Understanding what influences your financial decisions Decisions that create high well-being

19. Summary • Decision- a choice that will affect a person’s life • Routine- everyday, simple decisions that can become habit • Major- big, complex decisions that should be thought out carefully • Decision Making Process • What are the steps? • Remember… The choices you make dictate the life you lead.

20. Needs, Wants, and Cupcakes Icing and decorations represent wants, the extra items that make our lives interesting and enjoyable. The cake part of a cupcake represents our needs. They must be present and addressed before considering any icing or decorations (wants). When making spending decisions, consider if your needs are met before spending on any of your wants. What you determine to be a need versus a want will depend on your personal values, just like your preference for different types of cupcakes.