Presentation on theme: "Unit 1 - Your Financial Plan:"— Presentation transcript:
1 Unit 1 - Your Financial Plan: Where It All Begins
2 “Most people don’t plan to fail… They simply fail to plan!”
3 What is 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.
4 Financial Planning is more than budgeting and investing. Financial planning is a thinking process that helps achieve goals.
5 What are the components of a Financial Plan? GoalsNet Worth StatementBudgetInsurance PlanSavings PlanInvestment Plan
6 Benefits of Having a Financial Plan—Which one(s) 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.
11 These are issues that will affect this step WANTS VS. NEEDSThese are issues that will affect this step
12 Example of Wants and Needs Food for breakfastClothes for schoolTransportation to school or work______________WANTSAn iPODDVD PlayersCell PhoneHot Car______________STOP! Stop the powerpoint and do the sitdown for wants and standFeed the Pig Clip1-C
13 Needs vs. Wants Activity Directions:Stand up if this is a need for you.Sit down if this is a want for you.Clothing (basic)Going to the moviesGoing out to eatPlace to live (shelter)A vehicleA computerAn I-PODGoing to a basketball gameFoodCell phoneCable televisionDesigner clothing
14 ValuesValues strongly influence our spending habits. We don’t usually spend our money on things we do not feel are important.
15 Examples of Values Getting a good education Religious faith or beliefs Social causesHandling money responsiblyFriendships/The people I hang out with____________________________1-D
16 Term Goals Within three months Three months to a year More than a year Incidental GoalsStepping stones to short-term goalsSHORT-TERM GOALSWithin three monthsINTERMEDIATE-TERM GOALSThree months to a yearLONG-TERM GOALSMore than a year1-E
17 Instant vs. Delayed Gratification Examples of Delayed GratificationSaving 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
28 REALITYRecognize that unless you strike it rich somehow, you’ll have limited amounts of time andmoney to use. That’s the Reality.RESPONSIBILITYIf you handle your moneywisely, you can do a lot of good for yourself and others. Onthe other hand, it’s your own fault if you blow it. That’s theResponsibility.RESTRAINTRemember the idea of delayedgratification? You show Restraint when you have theself-control to save your money for a future goal instead ofspending it now.1-N