Jason Towles - 1.1.5 Journal - Your Financial Goals and Spending Habits PDF

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1.1.5 Journal: Your Financial Goals and Spending Habits Journal Financial Literacy Name: Jason Towles Date: 9-26-2021

Today, you're going to reflect on your own spending habits and then think about how they might change in the future as your life situation changes. To get the best grade possible, follow the instructions in the assignment closely, complete the model, and answer all questions completely. This assignment is worth 20 points.

One helpful tool for making financial decisions is a cost-benefit analysis. This is a way to organize your likes and dislikes in a way that allows for a meaningful comparison. Usually, you begin by making a chart that lists benefits and costs of each choice. When you’re done, the chart should show you what you could gain or lose with each choice.

1. Think back to Isaiah’s situation. Using the information you’ve been given about his spending habits, complete the chart below. You will need to consider the costs and benefits of his different approaches to spending money. List two or three items in each box, then answer the question that follows. (8 points)

Time Period

Benefits

Costs

First 6 Months worked to make money Had fun

Movies Candy

saved more money spent less money

costs less spent just a little bit

Next 6 Months

2. Based on the cost-benefit chart, in which time period did Isaiah’s spending habits best support his financial health? Explain your reasoning in 2-3 complete sentences. (2 points)

The time period that Isaiah’s spending habits best supported his financial health was in the 2nd half or the “next 6 months”. He was able to see that he could still have fun but spend less money. He was also able to save more but managing how many times he went out to the movies and bought anything.

Now consider your own spending habits, current life situation, and your future. Complete the chart below and then answer the question that follows.

3. How do you spend your money? Write down some of your spending habits in the chart. Then consider some benefits and costs to these spending habits. List at least two items in each box of the chart. (6 points)

Spending Habits

Benefits

Costs

-Things for the game on my cell phone

- Fun for the moment

-Eating out - Not having to cook -Not having to clean -Fun

- $5, $10, $20 or $25 each time. 3 times a week. ($15-$75/week) - $15 to $30 each time. 4 times a week. ($60-$120/week)

-Shopping -Having new things -Fun

- $50 to $100 each trip. 2 times a week. ($100-$200/week)

4. How well do your spending habits help you reach your current and future goals? What could you change to meet your goals? Explain your reasoning in 3-4 complete sentences. (4 points)

My current spending habits are not well at all. They have been costing me more money than I am saving. I find myself spending up to $395.00 per week. With these habits they are keeping me from reaching goals I have set for myself. I could minimize the number of times I buy something for my game, go out to eat or even go shopping. To help reach my goals I will only spend the lower of the amounts in each category and limit the number times I do each. This will then save me about $325.00 per week.

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