CONTENT STATEMENT
Financial decision-making involves considering alternatives by examining costs and benefits.
CONTENT ELABORATION
Establishing personal goals often involves evaluating alternative choices. When these goals include financial decision-making, individuals need to examine costs and benefits.
Most financial decisions involve tradeoffs because resources are limited. Those decisions result in an opportunity cost.
For example, if an individual decides to place money into their retirement account, they will have less money to place into their short-term savings account.
EXPECTATIONS FOR LEARNING
Explain how financial decision making involves considering alternatives by examining costs and benefits.