Setting financial goals to manage risks and rewards
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Introduction
In this activity, students learn how to set SMART short- and long-term financial goals and consider why it is important to set financial goals to manage financial risks and rewards.
Understanding how to set and track goals is important learning for all students. It supports students to build their personal capability and sets the foundation for forming life-long habits that will support them to plan for success. This learning provides a foundation for students to understand the importance of establishing long-term goals such as a retirement income through superannuation.
Achievement standard
By the end of Year 9, students explain the role of Australia’s financial sector and its effect on economic decision-making by individuals and businesses. They explain the interdependence of participants in the global market and the effect on economic decision-making. They explain the reasons for trade and Australia’s pattern of trade with Asia. They explain why businesses seek to create and maintain a competitive advantage. Students explain how individuals and businesses manage consumer and financial risks and rewards.
Students develop and modify questions to investigate an economic and business issue. They locate, select and analyse information and data from a range of sources. They interpret and analyse information and data to explain economic trends and cause-and-effect relationships, and identify consumer and financial impacts. They develop a response to an economic and business issue, taking account of economic, business or financial factors. They evaluate a response using criteria and make decisions about how it is to be implemented. Students use economic and business knowledge, concepts and terms to develop descriptions, explanations and arguments that acknowledge research findings.
Content descriptions
Economics and Business Knowledge and Understanding
How individuals and businesses manage consumer and financial risks and rewards. (AC9HE9K05)
Economics and Business Skills
Develop and evaluate a response to an economic and business issue, using cost-benefit analysis or criteria to decide on a course of action. (AC9HE9S04)
Create descriptions, explanations and arguments, using economic and business knowledge, concepts and terms that incorporate and acknowledge research findings. (AC9HE9S05)
Student learning resources
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Saving and savings goals
Moneysmart savings goals calculator
Setting SMART goals
Suggested activity sequence
This sequence is intended as a framework to be modified and adapted by teachers to suit the needs of a class group.
- Brainstorm how having a financial goal will:
- Bring financial rewards- For example, interest earned over the period, feeling of security, developing a savings habit.
- Mitigate against financial risks- For example, having the money to buy means you don’t have to borrow, having a financial buffer in case of an emergency or unexpected event.
- Students complete part 1 of the worksheet.
- As a class, read through the how-to-sheet.
- Students complete part 2 of the worksheet.
- As a class, discuss the following:
- How does setting financial goals bring rewards?
- How does setting financial goals help manage risks?