4
Knowing yourself is one of the most important requirements for making
personal finance decisions. Financially capable people are well aware of the
differences between needs and wants. Values, ethics, and goals lie beneath
your everyday decisions and overall behavior. Good management involves
using resources (what you have) to reach goals (what you want). Economic
decision-making tools include cost-benefit analysis and marginal analysis, but
common sense is a basic decision-making tool as well. It reminds you to live
within your means so you can enjoy financial security now and in the future.
Making the best use of resources calls for planning, acting on your plan, and
evaluating the results.
College
and Career
Readiness
Focus on Finance
Financial Goals
Setting financial goals is an important step in creating financial
independence. Without goals, you may find yourself spending money
but not achieving the things that are most important to your well-being.
Prioritizing your needs and wants as well as your values can help you:
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The sooner you put a plan in place, the sooner you can start making wise
decisions and be on the road to financial independence and security.
Chapter 1
Personal Finance: An Overview
Reading Prep. Review the table of contents
for this text. Trace the development of the
content that is being presented from simple
to complex ideas.