Personal Finance Unit 1 INCOME

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Personal FinanceUnit 1INCOME
Most people dont plan to fail. They simply
fail to plan.
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What is financial planning?

• More than budgeting
• More than investing
• Financial planning is a thinking process that
  help achieve goals.

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How do you build a house?

• Floor plan
• Gather resources
• Consider options
• Take action

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Questions You Will Answer

• What are the five steps in the personal financial
  process?
• How do you set SMART goals?
• How do your choices affect your money?
• How can money help you live a satisfying life?

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Quotes to Consider

• Most people dont plan to fail. They simply
  fail to plan.
• If you dont know where you are going, any road
  will take you there.

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Can You Believe

• Only ___ of teenagers have ever made a written
  plan for their money.
• In a national survey, ___ of teenagers thought
  earnings from a savings account might not be
  taxed.

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Can You Believe

• ___ of teenagers surveyed thought you had no
  responsibility at all to repay fraudulent charges
  on a credit card.
• ___ of teenagers surveyed said they put some
  money in savings when they receive an allowance
  or earn some money.

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Can You Believe

• ___ of teenagers are likely to go to their
  parents for financial information.
• ___ of teenagers consider themselves to be
  spenders rather than savers.

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Financial Planning Process
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STEP 1

• Set Goals

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NEEDS vs WANTS

• NEEDS
• Essentialsthe basics of life
• Food
• Clothing
• Shelter

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NEEDS vs WANTS

• WANTS
• Simply increase the quality of living

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Assignment 1.1page 4My Needs and Wants Can
I Tell the Difference
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Values

• The beliefs and practices in your life that are
  very important to you.

• Family
• Friends
• Teachers
• Church
• Work

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Assignment 1.2

• My Values
• Page 5

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S.M.A.R.T. GOALS
Specific
Measurable
Attainable
Realistic
Time-bound
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SMART Goals Timelines

• Short Term
• Up to three months
• Intermediate Term
• Three months to one year
• Long Term
• Longer than one year
• DELAYED GRATIFICATION

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Assignment 1.3My SMART GoalsPage 7
Save 25 so I can take my friend out for pizza.
1st of next month
Short term
25.00
7.50
25.00
7.50
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Step 2

• Analyze Information

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Cash Flow

• A measure of the money you receive and the money
  you spend.

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Assignment 1.4Personal Spending Record Page 8
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Step 3

• Create A Plan

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Decision Making

• The process of considering and analyzing
  information in order to make a decision.

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Factors that Can Influence Your Goal Setting and
Decision Making

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Opportunity Cost

• Choosing one option may mean giving up altogether
  another goal.
• Its a tradeoff!

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Assignment 1.5My Decision
Pros Cons


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Step 4

• Implement the Plan

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Three Rs of Money

• Reality
• Responsibility
• Restraint

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Step 5

• Monitor and Modify
• the Plan

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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?

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ACTION STEPS

• Page 14
• Write down two BIG GOALS
• Write the first and second step for each goal

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Questions To Answer

• What are the five steps in the personal financial
  process?
• How do you set SMART goals?
• How do your choices affect your money?
• How can money help you live a satisfying life?

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2001 National Endowment for Financial Education,
Greenwood Village, Colorado, 80111