“Identify Goals and Constraints”

Decisions are important because scarcity implies that by making one choice,

you give up another. As a practical people we want the best decision in life.

And the first step on making sound decisions is to have well-defined goals

because achieving different goals entrails making different decision. In my

life as a student and a daughter, I don’t want to waste the money and the

effort that given by my parents on me, so my goal is to maximize my grade

on the subjects that I know that I’m not that good at, rather than

maximizing my overall grade, in this situation my study habits differ

accordingly. I study and allocate more time on subjects that are hard for me

to cope up and understand while on other subjects I allocate less time on

studying it. In this decision I face constraints that affect my ability to

achieve my goal, this constraints is the hours or day that I allocate to earn

higher grade. Since I don’t want to waste the effort and money that my

parents invested on me, then I need to pass all the subjects because if only

I will focus on the subject that I know I am good at and neglect the subject

that I am bad at then there are possibilities that I might not pass all the

subjects and tend to have a summer classes and it will become a burden to

me and for my parents.

“Understand Incentives”

Within the firm, incentives affect how resources are used and how hard

workers work. To succeed as a manager, managers must have a clear grasp

of the role of incentives within the organization such as firms and how to

construct incentives to induce maximal effort from those they manage. My

mother on the other hand, as one of the head of the family gives me

different incentives such as; if I pass all my subjects without a grade below
85 she will buy me whatever I want. And if I got a higher grade than the last

grading period then my allowance will increase. In these simple incentives I

was motivated to work and study hard as well as do my best in all subjects.

Because if I put a little effort then I may not or will receive a little reward,

while if I put much effort then I can receive a big reward. Let’s just assume

that I was greedy and focused only on my own self-interest that is why I

take the incentives that my mother given to me. However my mother’s

incentive plans help us both. In her side, she does not need to worry so

much about me because she knows that I did well on school, that I take

studying seriously and give importance to it. While for me, it helps me to

gain useful knowledge that I might able to use in the future, also it helps me

to make my parents happy and get what I want. Thus I can say that

understanding incentives is a must because it will help everyone’s job easier.

“Recognize the Time and Value of Money”

Money is one of the important things that we humans should possess.

However it is important to recognize that Php 1 today may worth more than

Php 1 in the future. If you recognize the time and value of money then

surely you will able to gain a lot of many in the near future. In my case, my

family buys a land worth 1.2 million and we invested it to UALOTRANSCO

Cooperative with the terms rent to own after paying it for 7 years with a

12% interest per year. Since we invested 1.2 million last year with a 12%

interest rate per year then after 7 years our investment would be 2.6

million. However since the pandemic is not over the UALOTRANSCO

Cooperative has not yet started their operation and we still do not receive

any payments from them. Thus if the interest rate is higher, the opportunity

cost of waiting is higher however the amount of the present value is lower.