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Financial Planning. LEARNING OBJECTIVES Standard 1: Students will use a rational decision- making process to set and implement financial goals. Objective.

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Presentation on theme: "Financial Planning. LEARNING OBJECTIVES Standard 1: Students will use a rational decision- making process to set and implement financial goals. Objective."— Presentation transcript:

1 Financial Planning

2 LEARNING OBJECTIVES Standard 1: Students will use a rational decision- making process to set and implement financial goals. Objective 1: Explain how goals, decision-making, and planning affect personal financial choices and behaviors. – Discuss personal values that affect financial choices (e.g., home ownership, work ethic, charity, civic virtue). – Explain the components of a financial plan (e.g., goals, net worth statement, budget, income and expense record, an insurance plan, a saving and investing plan). – Compare short-term and long-term financial goals.

3 What is your first experience or memory with money?

4 DFGDF What does the road ahead of you look like?

5 “If you don’t know where you are going, any road will take you there.”

6 STANFORD MARSHMALLOW EXPERIMENT

7 Financial Planning Is a process of setting goals, developing a plan to achieve them, and putting the plan into action.

8 What is this? What is it used for? How can it be compared to financial planning?

9 Who is Financial Planning for?

10 have a financial plan?

11 FINANCIAL

12 You know where to use money to achieve your goals

13 Less chance of going into debt you cannot handle

14 Components of a Financial Plan Goals Net Worth Statement Budget Insurance Plan Savings Plan Investment Plan

15 How do I make a Financial Plan? 1.Determine your current financial situation. Make a list of items that relate to your finances: Savings/Investments Monthly Income (Job Earnings, Allowance, Gifts, Interest) Monthly Expenses Debts

16 2. Develop your financial goals. Consider your attitude toward money. Ask yourself the following: How do I determine if it is more important to spend money now, or save it for the future? How do your personal values affect your financial decisions? How do I make a Financial Plan?

17 3.Identify your options. Continue the same course of action. Expand the current situation. Change the current situation. Start something new. How do I make a Financial Plan?

18 4. Evaluate your alternatives. Consider the risks and consequences of each decision you make. Be aware of all sources of financial information. Evaluate consequences of choices, both good and bad. Understand risks involved with choices. How do I make a Financial Plan?

19 5. Create and use your financial plan of action. How do I make a Financial Plan?

20 6.Review and revise your plan. As we get older and our circumstances, our finances, needs, and wants will change, therefore, our financial plan must be flexible as well. How do I make a Financial Plan?

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

23 FAMILY

24 FRIENDS

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26 HONESTYHONESTY

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28 INDEPENDENCE

29 RELIGION

30 Your Financial Values Inventory

31 Scarcity “Scarcity is an economic principle stating that because of limited resources, an economic system cannot possibly produce all the goods and services that people want; therefore, choices must be made about how the limited resources will be used.” -Consumer Economics & Education, Glencoe, 2003

32 WANT VS NEED GAME

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41 What Is The Differ ence? What Is The Differ ence?

42 What are BASICS OR ESSENTIALS

43 FOOD

44 CLOTHING

45 SHELTER

46 ARE THERE OTHER NEEDS

47 WANTS Simply increase the quality of living What does that mean? Simply increase the quality of living What does that mean?

48 Needs vs. Wants Take a few minutes to complete exercise 1A on page 4.

49 Values strongly influence our spending habits. We don’t usually spend our money on things we do not feel are important. Typically, the more important something is, the more we are willing to spend on it. DO YOU AGREE OR DISAGREE?

50 FINANCIAL VALUE INVENTORY ACTIVITY

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53 What Are

54 A written statement of something a person wants or needs to accomplish. – What Are Some Examples Graduate from high school Earn a college degree Buy a car Get a job Lose 15 pounds

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58 SMART Goals S pecific…….. M easurable… T ime-Limited.. R ealistic……. A ttainable….. “Pay for lodging, transportation, meals for a 5-day trip to Washington, D.C.” “$300 through fundraising, $50 from birthday money, save $25 a week.” “If I stick to my plan, I’ll have the money when I need it.” “I still have enough money to live on while I work toward this goal.” “I need to have all the money by 6 months from now.”

59 Time-bound Short Term Goals – Present to 6 months Medium Term Goals – 6 months to a year Long Term Goals – 1 year and longer

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62 Assignment On a piece of cardstock, complete the following. – On one side, write one short term goal, one intermediate goal, and one long term goal. MAKE SURE THEY’RE SMART, FINANCIAL GOALS! Underneath each goals create an action plan of steps or tasks you will need to take to achieve that goal. List any possible barriers to achieving your goal. – On the other side, create a collage (visual representation) of your goals. Make sure you include a visual for the three goals you listed but you may present more if you wish. See samples if needed.

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64 Writing Prompt Write a paragraph identifying one of your long or short-term goals. Explain how it reflects your needs, wants, values, and priorities. Write an action plan to achieve the goal, including tasks, timelines, resources needed, and barriers anticipated.


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