(gentle music)
[TEXT: DEMOCRACY, PROSPERITY, HUMAN RIGHTS, EDUCATION, SECURITY A PRODUCTION OF U.S. DEPARTMENT OF STATE]
Hello, my name is Mike Poulin.
[TEXT: Mike Poulin, Certified Financial Trainer, The Financial Gym, Washington, D.C.] I'm a certified financial trainer,
with The Financial Gym, a personal financial services company
that works with clients to help them set financial goals,
and create a plan for accomplishing them.
Educating individuals on personal finance
has always been a passion of mine,
because of the positive impact that it can have
on everyones' lives.
I've always wanted to spread financial literacy,
with the mindset that everyone
can achieve their goals in life,
with the right amount of financial knowledge.
This all starts with changing one's perspective
of money management, through simplified explanation,
and open reflection of past financial influences.
I am interested in helping others understand
that finances can be fun, and not stressful.
[TEXT: Fundamentals of Personal Money Management: Making SMART Money Choices] Welcome to Fundamentals of Personal Money Management.
This lesson is Making Smart Money Choices.
In this lesson, we will learn
how to put our new money management knowledge and skills
[TEXT: Learning objectives: Budgeting for your future] into action, by uncovering the factors
[TEXT: Understand the factors that influence financial decisions] that influence our financial decisions,
[TEXT: Set realistic financial goals] setting realistic goals, and devising strategies
[TEXT: Strategies for SMART financial behavior] to change our behavior.
Before we can start making smart money choices,
we need to understand the factors
that influence how we think about money.
Much of what we learned about managing our finances
comes from our family and our community.
What did your family teach you about money?
Were your parents diligent savers, who never splurged?
Did they spend everything they had, and take on debt?
How did this affect you, and the way that you view money?
Similarly, our friends' financial habits
affect our own financial behaviors.
If your friends like to spend time together,
shopping or eating out,
you're more likely to spend your time and money
on those activities as well.
Even national norms can influence us.
If it seems normal to take on
large amounts of student debt in your country,
you might not think twice about whether taking on debt
is the best decision for you.
To uncover the hidden influences in your life.
Make a list of what you've learned about money
from your family, friends, and wider community.
Which of those lessons will lead
to positive financial decisions?
Which of those could negatively affect your finances?
Setting financial goals
can help us overcome negative influences,
and start making smart money decisions.
If you don't know where to start, ask yourself,
what's important to you?
What do you want your life to look like?
In one year, five years, or 10 years?
Make a list.
Once you have ideas
about what you'd like to achieve financially,
[TEXT: S.M.A.R.T.] you should turn each goal into a S.M.A.R.T. goal.
This means that your goal should be specific.
[TEXT: Specific] It should be clearly defined. Measurable.
[TEXT: Measurable] You should have a way to evaluate your progress.
[TEXT: Achievable] Achievable. Do the math to calculate
when you can realistically expect to achieve your goal.
[TEXT: Relevant] Relevant. Your goal should align with your values,
and what you want out of life.
[TEXT: Timebound] Timebound. You should be able to identify a target date
for when you will achieve your goal.
For example, earn more money is not a S.M.A.R.T. goal.
Submit one job application per week
to secure a position as a project manager
for a nonprofit, making $60,000 by the end of the year
is a S.M.A.R.T. goal.
Following these guidelines will put you in the best position
to start taking action towards your goals,
but you will likely need to change your financial habits,
and behaviors, to achieve those goals.
There are several strategies that we can use
to modify our behavior.
Consider which of these strategies work best
for the behaviors that you're trying to change.
[TEXT: Monitoring] Monitoring. Keep track of behaviors
that you do or don't want to do.
Perhaps you've decided
not to buy any new clothes for one month.
To keep track of your progress, and stay accountable,
use a calendar to mark each day that you don't buy clothes.
[TEXT: Start small] Start small. Behavior change takes time,
and it's okay to start small.
If you buy lunch every day during the week,
but you want to cut back to save money,
commit to making lunch at home, one day per week.
Once you get used to doing that,
you can just add on another day.
[TEXT: Automate] Automate. Set up systems
that make the behavior you want to do easy,
or ideally automatic.
If you want to ensure that you pay
your credit card on time each month, set up auto pay,
so you don't even have to think about it.
[TEXT: Pairing] Pairing. Link a behavior that you already do
to behavior that you would like to do.
If you want to start tracking your daily expenses,
commit to doing it after something you do every day,
like brushing your teeth.
[TEXT: Rewards] Rewards. Give yourself a financially healthy reward
when you achieve a big goal.
For example, after you reach a big savings goal,
you could go out to dinner with a friend to celebrate.
Keep your reward proportional to the goal you achieve.
[TEXT: Community] Community. As we already established,
the people around us influence our behavior.
You can use this to your advantage
by surrounding yourself with other people
who are already doing the things
that you want to do, or are working towards similar goals.
Remember that you are seeking progress, not perfection.
Changing your behavior is not always easy,
but ultimately, it will lead you closer
to your financial goals,
and the kind of life that you want to live.
For more information on this course,
[TEXT: For more on this course and to access related resources, visit our website.] and to access related resources, visit our website.
[TEXT: DEMOCRACY, PROSPERITY, HUMAN RIGHTS, EDUCATION, SECURITY A PRODUCTION OF U.S. DEPARTMENT OF STATE]