NEFE High School Financial Planning Program Unit One - Your Financial Plan: Where It All Begins. Unit 1 - Your Financial Plan: Where It All Begins

Transcription

1 Unit 1 - Your Financial Plan: Where It All Begins

2 Most people don t plan to fail They simply fail to plan! 1-A

3 What is financial planning? More than budgeting More than investing Financial planning is a thinking process that helps achieve goals.

4 Financial Planning A blueprint or plan for managing all components of a person s money. Arranging to spend, save, and invest money to live comfortably, have financial security, and achieve goals.

5 What are the components of a Financial Plan? Each topic will be addressed in detail through out the course. Goals Net Worth Statement Budget Income and Expense Record Insurance Plan Savings Plan Investment Plan

6 Benefits of Having a Financial Plan Which one do you think is most important? You have more money and financial security. You know where to use money to achieve your goals. You have less chance of going into debt you cannot handle. You can help your partner and support children if you have a family.

7 The Five-Step Financial Planning Process 1-B

8 STEP 1 Set SMART Goals

9 Sample Wants and Needs NEEDS Food for breakfast Clothes for school Transportation to school or work WANTS An ipod DVD Players Cell Phone Hot Car 1-C Feed the Pig Clip

10 Values Values strongly influence our spending habits. We don t usually spend our money on things we do not feel are important.

11 Values Getting a good education Religious faith or beliefs Social causes Handling money responsibly Friendships/The people I hang out with 1-D

12 Term Goals SHORT-TERM GOALS Within three months INTERMEDIATE-TERM GOALS Three months to a year LONG-TERM GOALS More than a year 1-E

13 Delayed Gratification Saving money over time to make a major purchase. Waiting to buy a new product until the price goes down. Waiting to see the latest movie until the crowds get smaller and the lines shorter. 1-F

14 S-M-A-R-T GOAL CRITERIA Specific Measurable Attainable Realistic Time-Limited 1-G

15 STEP 2 Analyze Information

16 Cash Flow A measure of the money you receive and the money you spend.

17 Spending Record $35.00 $5.00 $15.00 $55.00 $15.00 $6.00 $4.00 $7.00 $8.00 $15.00 $ I

18 STEP 3 Create a Plan (Decide)

19 Decision Making The process of considering and analyzing information in order to make a decision.

20 Age Wants Factors That Affect Decision Making Needs What about you? Family Time Culture Society Values Money Motivation Education 1-J Habits Attitudes

21 Opportunity Cost Choosing one option may mean giving up altogether another goal. It s a tradeoff!

22 Decision-Making Process Identify Your Goal Examine Options Establish Criteria Weigh Pros and Cons Make a Decision Evaluate Results 1-K

23 STEP 4 Implement the Plan

24 REALITY RESPONSIBILITY RESTRAINT 1-N

25 SAVING SPENDING SHARING 1-O

26 STEP 5 Monitor & Modify the Plan

27 Monitor and Modify Are your existing goals still worth doing? Is there a new goal to add to your list? Is there an existing goal you want to drop or change?

28 Unit 1: Your Financial Plan: Where it All Begins