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

2. “Most people don’t plan to fail… They simply fail to plan!”
Financial Education Impact
3 years after implementing a financial education mandate, participating states saw increased credit scores and lower delinquency rates on credit accounts
Georgia (+11 points)
Idaho (+16 points)
Texas (+32 points)

3. 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
______________
Activity 1A

4. Values Getting a good education Religious faith or beliefs
Social causes
Handling money responsibly
Friendships / The people I hang out with
____________________________
On left margin of packet, write down 2 personal values you have

5. Term Goals Within three months Three months to a year More than a year
SHORT-TERM GOALS
Within three months
INTERMEDIATE-TERM GOALS
Three months to a year
LONG-TERM GOALS
More than a year

6. 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.
____________________________________________________________________
Activity 1B

7. The Five-Step Financial Planning Process

8. S-M-A-R-T GOAL CRITERIA
Step 1 – Set SMART Goals
Specific
Measurable
Attainable
Realistic
Time-Limited

9. Planning Spring Break Specific Measurable Attainable Realistic
“I want to go to Daytona for Spring Break” is more specific than “I want to go somewhere fun over Spring Break”
Measurable
“I’ll need $150 for my share of the hotel room for the week” is measurable; “I want to save a bunch of money for the trip” is not.
Attainable
“I’ll split the driving with my friends and take $200 more for gas, food, and other spending” is much more attainable than “I want $500 to fly there and $700 for spending money.”
Realistic
“I’ll save $60 a month from my paycheck for the next six months” is more realistic than “I’ll buy lottery tickets every week”
Time Bound
“I want to save all the money by March 1st” gives you a specific date from which to plan backwards, unlike “I want to save all the money by spring.”

10. SMART Goals Specific…….. Measurable… Attainable….. Realistic…….
“Pay for lodging, transportation, meals for a 5-day trip to Washington, D.C.”
Measurable…
“$300 through fundraising, $50 from
birthday money, save $25 a week.”
Attainable…..
“If I stick to my plan, I’ll have the money when I need it.”
Realistic…….
“I still have enough money to live on while I work toward this goal.”
Time-Limited..
“I need to have all the money by 6 months from now.”
Activity 1C

11. Step 1 – Set SMART Goals Individual Assignment My SMART Goals
List 3 personal financial goals in SMART format
Determine if each is a want or a need
Estimate how much each will cost and how long it will take you to reach your goal.
End

12. Where Does Your Money Go?
Warm Up –
At the top of your hand out, write down your best guesses of the total amount of money you spent in the last week
Include food, gas, entertainment, clothes, etc.
If you went out to dinner with your family, estimate your share of the meal

13. Step 2 – Analyze Information
Where does your money go?
How might this list change when you are in your 20’s?
Top 5 Items Guys Bought with their Own Money
Top 5 Items Girls Bought with their Own Money
Food
30%
Clothes
43%
Soda or Soft Drinks
26%
Candy
34%
24%
32%
21%
31%
Music
19%
Salty Snacks
22%

14. Analyze Information
How do your actual spending habits align with your values?
Will you be able to achieve any of your financial goals with your current spending and saving habits?

15. Spending Log $6.00 $35.00 $4.00 $7.00 $5.00 $8.00 $15.00 $15.00 $55.00
Step 2 – Analyze Information
Cash Flow – measures the money you receive and the money you spend
$6.00
Starting Monday, you are to write down/ keep receipts for everything you spend money on for 7 days to create your own Personal Spending Log
$35.00
$4.00
$7.00
$5.00
Teacher notes: Next class hand out the Personal Spending Log spreadsheet. You may want to also set up a Celly account to text reminders to your students.
$8.00
$15.00
$15.00
$55.00
$40.00
$15.00

16. Factors That Affect Decision Making
Needs
Age
Time
What about you?
Wants
Culture
Society
Family
Motivation
Money
Values
Education
Habits
Attitudes

17. Step 3 – Create a Plan Decision-Making Process Evaluate Results
Identify Your
Goal
See a movie
Type of movie
When
How much
Establish
Criteria
Weigh Pros
and Cons
Don’t want to wait hours, another film showing that you want to see
Make a Decision
Buy tickets to show that is playing now
Evaluate
Results
Did you like movie?
Decision-Making Process

18. The Decision- Making Process
Decision Making and Financial Planning
The Decision- Making Process
The Financial Planning Process
Evaluate
Results
Make a Decision
Identify Your
Goal
Weigh Pros
and Cons
Establish
Criteria
Monitor & Modify
the Plan
Implement
Set Goals
Create a Plan
Analyze
Information

19. Know What You Want Identify Your Goal Decide where to eat Establish
Criteria
1. Less than $10
2. Less than 30 minutes away
Teacher Note: the hyperlink takes you to a 10 minute Weird Al Yankovic music video. It is a spoof of a 2 hour song/video by R. Kelley. You don’t have to show the entire thing. But the point of it is how relatively simple decisions can take forever. i.e. Lets go out to eat. OK. Where do you want to go? I don’t care. Where do you want to go? How about Chick-fil-A. No, I was just there, how about Olive Garden. No, I don’t like their pasta. How about….
3. Home by 9:00
Stuck in the Drive Through

20. Create a Plan Opportunity Cost Satellite Decisions
When you can’t accomplish all your goals, you have to make some sort of trade-off
What you give up to get something else
Satellite Decisions
When a major decision leads to several smaller ones
Exercises 1D and 1E

21. Deciding to Buy a Car What kind? What dealer? Buy or lease?
New or used?
What features?
Exercise 1F

22. Step 4 – Implement the Plan
REALITY
Resources are limited
RESPONSIBILITY
Plan vs. “Winging it”
RESTRAINT
Know when to say NO

23. Implement the Plan Guidelines for Sticking with Your Plan
Remind yourself of goals regularly
Tell other people about your goals
When you’re going to spend money, decide how much in advance and only take that amount
Review your plan regularly so you can make adjustments quickly

24. SAVING
SPENDING
SHARING

25. Step 5 – Monitor and Modify
Review your plan and your progress at regular intervals
When you achieve a goal, celebrate and cross it off your list
Ask yourself are your existing goals still worth achieving? Is there a new goal to add to your list?

26. Family Events Activity
Consider how each family would handle the following:
Vacation
Illness
Transportation needs
Flat screen TV
Night out

27. Unit 1: Your Financial Plan:
Where it All Begins