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Teaching Youth to Make Smart Financial Decisions


Managing money successfully always starts with making the right decisions. The Center for Financial Empowerment, the nonprofit organization founded by SCE Credit Union, believes learning responsible personal finance concepts early in life equips teens with the skills to make smart decisions about money when it matters most. The following excerpt from our high school financial literacy curriculum explains how understanding your values and goals help in making smart financial decisions.

Have you ever thought about what contributes to the financial choices you make? There are many ways to spend our money. Whether you choose to buy brand-name items or knock-offs, if you splurge on luxury or like to be frugal, if you value quality or quantity – your personal values and your perceived needs and wants all influence your final purchase.


Values are the standards, morals, ethics and beliefs by which you live your life. Life’s experiences and influences help determine your personal values. Since each person’s experiences are unique, you can understand why someone else’s personal decisions may be different than your own.

Values play a large role in all decisions you make, including financial decisions. Values help determine your personal goals, and those goals usually involve money. So, the first step in deciding how to manage your money is to determine what you want your life to look like, both in the present and over the long term.

Needs & wants

“Needs” are goods or services required for survival. Food, water, clothing, shelter, and basic health care are general needs for everyone. On the other hand, “wants” are those items that can increase our quality of life but aren’t absolutely necessary for our survival. While we can meet a need in the most basic of ways, satisfying our wants makes life more enjoyable. 

Food is considered a need, but a chocolate chip sundae is considered a want. Clothing is considered a need, but those designer jeans you’ve had your eye on are a want. 
Being aware there are many ways to meet your basic needs, some of which cost more than others, can help you to determine how to spend your money.

Opportunity cost

Because all of us face limits on time and income, spending decisions involve trade‐offs. In order to get one thing, we must give up another. Opportunity cost is one of the most powerful concepts in learning to manage your money. When you recognize spending more on designer clothes leaves less of your money available for rent, or gas for your car, you’re ready to make informed choices based upon what’s most important to you.
There are many ways to satisfy your needs and wants. By understanding your own unique values, you can decide what you are – and are not – willing to give up to achieve your goals. Recognizing the trade-offs of your choices is the first step to making smart spending decisions.

Help us empower the next generation for financial success! 

The Center for Financial Empowerment is a 501c3 nonprofit organization whose mission is to empower disadvantaged youth through financial literacy education. Find out more about our work at