Chapter 1 Personal Financial Planning

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Chapter 1Personal Financial Planning

• Section 1.1 Financial Decisions and Goals

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Step 1 Determine your current Financial
Situation

• Make a list of items that relate to you finances
• Savings
• Income
• Expenses
• Debts

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Step 2 Develop Your Financial Goals

• Your attitude toward money can help you develop
  your goals
• Do you plan on getting a job right out of high
  school or continue your education?
• Different people value different things
• Is it more important for you to spend your money
  now or save it for the future?

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Step 3 Identify Your Options

• Expand the current situation
• Change the current situation
• Start something new
• Continue the same course of action

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Step 4 Evaluate You Alternatives

• Choose from many sources
• Financial specialists
• Technology
• The media
• Financial institutions
• Education

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Step 5 Create and Use Your Financial Plan of
Action

• A list of ways to achieve your financial goals
• If you want to save, what steps could you take to
  cut back on spending
• If you want to increase your income, maybe look
  into a part time job

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Step 6 Review and Revise your Plan

• Your financial needs will change as you get
  older.
• That means you financial plan should change along
  with your needs.
• Reevaluate every year or when a significant event
  occurs in your life.

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Types of Financial Goals

• Short term goals - these goals take one year or
  less to achieve
• Intermediate goals -Take 2 to 5 years to achieve
• Long term goals take more than 5 years to
  achieve

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Guidelines for Setting Goals

• The financial goals you set as a student will be
  different from the goals you have when you get
  older (pg 13)
• Your financial goals should
• Be Realistic
• Be Specific
• Have a clear time frame
• Help you decided what type of action to take

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Influences on Personal Financial Planning

• The three most important factors that will
  influence your financial decisions are
• Life situations
• Personal Values
• Economic factors