Lesson 8 - MsArgos/RMI_2501_Fall_2026 GitHub Wiki

As a group, and after reading Chapter 5, answer the following questions:

i) To what extent do you agree or disagree with this statement: 'Seeing the value of reaching a goal is often much easier than seeing a way to reach that goal'? Why? (Ensure this collective answer is not repetitive, redundant, incoherent, verbose, mundane, descriptive, vague, metaphorical)

ii) 'Determination and effort are not enough to reach a financial goal'. React.

iii) If budgets are projected results, can they function as a strategy or plan to reach these results/financial goals?

iv) Set a clear financial goal and apply all you have said above as steps and insights to reach this goal. (Follow the goal set by the first classmate. It is okay to disagree but if doing so leave a comment justifying it so your peer knows the reason behind it).

Reminder: work as a group, and edit each other's responses as much as you see fit.

i) This statement rings true for a lot of people, especially with financial goals. It is extremely easy to list all of the benefits of owning a car, but also extremely daunting once one starts to consider how they plan to go about obtaining it. To see a way to reach a goal, it is important to look at all of the individual steps within the process, such as checking past financial data, setting expectations, creating budgets, etc.... There is a stark difference between knowing how valuable a goal is and knowing how to achieve it. In addition, having a clear plan does not necessarily mean that the goal is realistic under the current financial situation. For example, setting a goal of saving 1 million does not tell us how much can actually be saved each month or how long it will take. Current income, necessary expenses, and available cash flow also need to be considered. If the original goal does not match these financial realities, the amount saved each month, spending or even the time frame may need to be adjusted. Even in theory if the financial plan works it can still be something difficult to follow through with everyday. Especially since humans make small impulsive decisions often. Like for example if someone wanted to go to a party they were invited to by a friend, they'll accept to go and accidently eat into their food or other savings budget. Or even getting small things like a energy drink everyday can slowly eat at it. These events are impossible to completely avoid in human lives even though in theory it seems like it is not. This happens because human brains are made to value what looks good in front of the eyes at the moment, along with the fact that those small spendings like energy drinks that are like a couple of dollars per can, does not feel like spending much, it almost feels like it does not make any difference to the big financial picture. However, repetition of such spendings can result in a significant spending after a period of time, which is often failed to being acknowledged in the early stage of. Moreover, even things like unexpected situations, like if you have a sudden medical emergency, or maybe you broke a primary item you use in your everyday life like your phone, can force someone to use the money they had saved. And then there's plans that are too restrictive from the beginning, that person could've spent a long time planning it out but once they lived it for a few days they realize they're miserable with it. A financial plan should not be considered as fixed because actual results may differ form the original projection. By monitoring the budget and adjusting can support make the goals more realistic. I think another reason is that a goal can seen simple when we only look at the final result. For example someone may want to buy a car or save for a trip but they also need to think about their monthly expenses and how much they can actually save. Breaking the goal into smaller steps can make it easier to see how to reach it. Furthermore, as mentioned earlier, the uncertainties which might arise while achieving the goal makes imagining the end goal easier than actually reaching it. I would add that breaking a goal into smaller steps is only useful if those steps can be measured. For example, instead of simply deciding to save ¥600,000 in a year, a person could set monthly or quarterly savings targets and compare their actual progress with those targets. This makes it easier to identify a problem early rather than realizing at the end of the year that the goal was unrealistic. It also connects the goal to the budget because the budget can show whether the planned savings are actually possible.

This is true. “Breaking the goal into smaller steps” is a really good idea. In reality, we can set a financial goal, such as saving money for a trip to the US but it is hard to achieve that goal. For example, I need to save 200,000 yen for my flight ticket by this December. This plan can be made quickly if I check an airline's website. However, it is hard to make a detailed plan. If we decide on a budgeting process, we need to understand our budget, set goals, and think about conservatism and timing. In my case, even if I decide that I need to save money, I tend to spend money on clothes I like, food, and going out to eat when a friend suddenly invites me. This can have a negative impact on my budgeting process. If I do not set a clear goal, such as a specific amount of money I can spend each month, I often spend small amounts of money that I did not plan for. However, before I realize it, I may end up spending a large amount of money.

However, an important fact to note is that the biggest reason for most people having trouble with imagining the plan is that usually the desired result is easy and they can immediately see what it is. But, much like with fitness and health planning, it's discouraging to not see immediate results and it's also difficult to estimate what they need to plan for in making your plan. So it's very easy to just give up.

ii) To achieve a financial goal, one should consider planning as part of their determination and effort, since these plans serve as your map to that destination. Determination and effort need to be backed by a budget. This budget should look at the savings that are needed. It should also check the cash flow that is available. It is important to use estimates, for income and expenses that are not certain. Making sure a goal is achievable in the first place will ensure that your Debt-to-equity ratio (D/E) won't be going to waste. Some goals, such as obtaining 1 million dollars in a year from nothing, for example, can likely be planned out and assessed as unobtainable given your circumstances, regardless of how much effort is put in. Logistical and analytical skills can be a lynchpin for bringing a long-term goal to fruition. Even if a goal is achievable and the original plan is realistic, determination and effort may still not be enough because financial circumstances can change over time; for example, income may decrease or unexpected expenses may happen, causing actual results to differ from the original plan. Having backpack plan is important because we cannot always predict what will happen. For example if someone is saving for a car but suddenly has to pay for a medical bill or repair, they may not be able to save the same amount that month. This does not necessarily mean they failed they can adjust their budget and continue working toward the goal. The key is to understand that unexpected circumstances can always come in our ways and so relying too much on determination and effort is not ideal. Because relying on those factors can also cause perfectionistic mindset (i.e. one minor failure seems like a total corruption of the goal), we should always have flexibility in our habits. Along with this, consistency is also important to consider as consistently adding effort to planning, without failing short is equally important to reach the financial goal. While determination and effort make up a large part of the journey, having practicality, critical thinking, quick judgement and consistency help make the effort fruitful and work towards the financial goal.

I agree with this statement. That’s because I failed a lot of times even though I made an effort and determination. I decided to save money for traveling to Kouchi prefecture, I need to save 150,000 yen for that trip, but as my job hunting has become more serious, I have started having many interviews, so I can not do longer work part-time job in short period of free time, so I have lost my main source of income. I also do not have any investments, that is why I have no recurring income. I just do recurring expenses for my grocery, even though I try to save money. As a result, I am so longer able to save the amount of money I originally planned to save each month. I think this happened because I did not consider the idea of being conservative enough, and timing was also bad. I should have affordable to have more budget and set a more realistic amount that I could save each month. This is not only for individuals but also for companies that are trying to grow or maintain stability. CEOs and top managers need to think about this situation. Even if they make a great effort to manage their company, they also need to consider the capital budget, which focuses on expenses and investments for long-term goals. For example, if a company has a long-term goal of diversification, such as expanding into another business sector, it needs to consider the required capital budget and its free cash flow. Free cash flow is the money the company has left after paying its expenses and debts. This helps the company understand how much money it can use toward its long-term goals. Therefore, even if a company has strong determination and makes a lot of effort, it cannot achieve its goal without considering its available financial resources and making a realistic plan.

I have also had financial plans fall through on me because the plan was too much or too little. But i think that planning is also, itself, too much for most because it's all too complicated in the modern consumer markets. At least in the US, you have to plan for multiple kinds of insurance, taxes, and any kinds of regular bills for your necessities like electricity, water, etc. In most of human history, while you did need to pay attention to the market, most people also had to have energy and food independence to some extent. Now we're more connected than ever and it leads to more complexities than ever.

As a conclusion,

iii)Yes, a budget helps estimate our financial situation and make a plan for reaching financial goals. A budget can become a strategy by showing the gap between the projected result and the financial goal. I would add that a budget is not necessarily the entire financial strategy, but it can be an important tool for putting that strategy into practice. The strategy determines what we want to achieve and the general approach we will take, while the budget translates that approach into specific amounts for income, spending, and saving. The budget can then be compared with actual results to determine whether the strategy is working. If the results are different from the projections, the budget can be revised rather than treating the original plan as fixed. If there is a gap, income and expenses can be adjusted to make the goal more achievable. A budget can also help with different goals such as saving and paying off debt. It gives us a better idea of what we can afford and what changes we need to make to reach the goal. A budget variance tells us the difference between the projected budget and actual financial outcomes. By comparing the projection to actual activities, we can notice if we are on the right track to reach our goals or if there is something needs to be adjusted. For example, if you notice an increase in the price of gasoline, you might need to come up with a solution such as cutting down on your hobbies or looking for a better-paying job just to balance the budget. They provide valuable information to plan, and help develop projected results to analyze the path. For instance, a budget functions as a translator from a big long-term goal, which can seem very broad and abstract, to realistic small steps that we need to take to achieve the goal. Thus, understanding the budget will helps us take certain steps forward to our financial goals.

Yes, budgets can function as a strategy or plan because they can show us not only the expected results but also how we should manage our income and expenses to reach our financial goals. If you look at the budget, it can see how much money you need to save, how much money you can spend obviously. This led us to decide how I should save money until the date I decided on. If we know about own budget, it is easier to set long-term goals. In addition, we can see how much operating budget and capital budget we use. From this we can analysis about own spending patterns. In addition, when we create the budget, we should consider not only our personal financial situation but also macroeconomic factors, such as interest rate, inflation, and economic conditions. We cannot change this ourselves, so we need to consider our budget predictions. If prices increase before our wages increase, our purchasing power decreases. Therefore, we may need to adjust our budget and reduce some expenses to stay as our goals.

Any good budget should be a plan, mainly because any useful budget is going to make it so you can achieve a desired result, whether it be going on a destination vacation or saving to buy a house. Budgets and plans aren't separate in any way.

iv) My financial goal is to save ￥600,000 in one year to buy a motorbike while maintaining enough money for regular living expenses and unexpected costs. First, I need to review my past income and expenses to determine whether this goal is realistic. I would then set a monthly saving target of ￥50,000 to reach the goal within one year. Because the motorbike is not something you buy often it should be part of the capital budget. Fuel, insurance and maintenance should stay in the operating budget. This, taking the future costs that comes with achieving the goal into consideration, is an important step we cannot forget about. In order to make the achievement of the goal positive to ourself rather than a negative consequence (i.e. if we do not foresee the expenses that comes with getting the motorbike, we end up "unexpectedly" paying huge money to maintain the state... rather than, enjoying having our own motorbike as we are supposed to), we carefully need to plan out what comes after reaching the goal as well. I can use my monthly budget to compare this target with my actual income and necessary expenses. If I cannot save ￥50,000 each month, I can reduce some unnecessary expenses or adjust my plan. I think another important step would be separate the 50,000 yen savings from the money used for regular expenses so it is easier to stay on track. I would also keep track of my spending each month and look at where I could make changes. At the end of each month, I would compare my planned savings with my actual savings. If there is a difference, I would check why it happened and adjust my budget for the upcoming month. At the same time I would keep some money available for unexpected expenses because saving exactly 50,000 yen every month may not be possible. I would also try to reduce my unnecessary spendings to help with savings depending on how feasible it is based on the planning done at the end of every month.

I agree with your idea. I think saving money for a ¥600,000 motorbike by considering both the capital budget and operating budget is a very good process. However, I think it is also important to consider how realistic this goal is for a student. For example, if we calculate based on a student’s income, and assuming someone is working in Tokyo, the minimum wage is ¥1,226. If a student works three times a week for eight hours, the monthly income would be approximately ¥117,696. Using a conservative approach, we could estimate the monthly income at around ¥100,000 instead. If the student lives with their family and can keep their monthly living expenses at ¥40,000, they will have ¥60,000 left. This ¥40,000 is probably used for groceries, hanging out, and lunch. This means that saving ¥50,000 per month would be possible. However, it is also necessary to prepare for unexpected expenses, so that money should be considered separately from regular living expenses and savings. For example, the remaining ¥10,000 could be kept as an emergency fund for unexpected costs. On the other hand, students who do not live with their families or who have higher living expenses would need to calculate their income and expenses more carefully It is important to understand their spending patterns before deciding how much they can realistically save each month.

Personally, my financial plan is to find a good job and to get married and start a family with my girlfriend. She and I are looking to move in together in the next few months and start trying for kids. In order to do this, I think it will be necessary for me to save a few thousand dollars and we will likely have to choose whether to stay here or go to America. But we're working on that plan and I'm paying off as much of my debt as possible.

i) “Seeing the value of reaching a goal is often much easier than seeing a way to reach that goal.” I agree with this statement in many ways because most of the time it is easy to see the benefits of achieving a financial goal, but it could be tricky when it comes to seeing the method that needs to be taken to achieve that financial goal. For instance, it is easy for someone to say they want to save up for education, travel, or save for retirement; however, it could be hard for someone to see how much they need to save per month to achieve their goal. According to the chapter, even though it is critical to have determination and effort, those two traits could be insufficient because it may not bring direction to achieving the financial goal. In my opinion, I believe making a budget helps a person have a clear vision of the method needed to achieve their financial goals. ii) “Determination and effort are not enough to reach a financial goal.” I agree with this statement because even though determination and effort are essential traits in someone wanting to achieve their financial goals, it might not be enough because a person still needs to have a realistic financial plan. For example, if someone has lots of determination and effort but no clue about their financial world and where their money goes, those two traits would not be sufficient enough for them to reach their financial goals. I learned from the budgeting process that in order to set financial goals you need to set a clear goal, set up your financial house in order, set up a financial plan or budget, and see the variance between the financial plan and reality. I believe it is also critical to make alterations to the budget according to changes in life; therefore, the financial goals could also change.

iii) If budgets are projected results, can they function as a strategy or plan to reach financial goals? Yes, I believe budgets could work not only as a projection of results but also as a strategic plan or method to reach financial goals. For example, I see budgets as methods because budgets help people estimate the money coming in and going out to help a person or a family reach their financial goals. According to the chapter, we need to set our goals, set the financial plan, and measure the variance between the projected budgeted results and the actual results. In my opinion, the comparison between the actual results and the estimated results is crucial because it lets us know if our method is working or not and if we need to change some strategies to make our financial plan viable.

iv) One financial goal that I would like to set is to save ¥300,000 for an emergency fund within the twelve months. Therefore, I need to come up with a way to make sure I could save up ¥25,000 every month. In order to do that, I need to have a clear vision of my income and expenses, and see if that ¥25,000 is viable within my financial world. Afterward, I need to set my financial plan or budget that states how much money I would need to save up for the emergency fund, and which expenses should be cut off in order to make that happen. Every year I would need to measure the variance between my actual results and my estimated budget. This would motivate me to make alterations if needed, and help me know if my goal is viable. To make this goal feasible,