INTRODUCTION TO PERSONAL FINANCE WHY DO WE NEED TO MANAGE OUR MONEY?

Today’s objective Personal finance impacts whether or not people meet their personal goals.

WHAT IS PERSONAL FINANCE? -A personal finance plan includes financial goals and a budget, including spending on goods and services, savings and investments, insurance and philanthropy. -More than budgeting, more than investing -It is a thinking process; an on-going thinking process

DECISIONS, DECISIONS -Your personal beliefs about money are major forces that guide your spending decisions and goals. -Personal finance is a roadmap in guiding you through your financial life. -You need to consider your career, salary, budget, savings plan, retirement plan, and goals. -It is never too early to start thinking about your personal finance goals!!!

HOW DO I BEGIN? -Think about a potential career and how you can obtain that career -Look at your current financial situation -Develop financial goals -Identify all of your options -Evaluate alternatives -Create and use a financial plan of actions -Review, revise, review, and revise you plan (this happens periodically)

DETERMINE YOUR CURRENT FINANCIAL SITUATION 1.Determine your current financial situation Make a list of items that relate to your finances: -savings/investment -monthly incomes (job earnings, allowance, gifts, interest) -Monthly expenses -Debts

DEVELOP YOUR FINANCIAL GOALS 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 decision?

IDENTIFY YOUR OPTIONS 3. Identify your options -Continue the same course of action -Expand the current situation -Change the current situation -Start something new

EVALUATE YOUR ALTERNATIVES -Consider the risks and consequences of each decision you make -1. Be aware of all sources of financial information -2. Evaluate consequences of choices, both good and bad. -3. Understand risks involved with choices

CREATE, REVIEW, AND REVISE Create and use your financial plan Just do it!!!!!! 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.

WHAT INFLUENCES YOUR GOALS? -Our society -Our culture -Your emotions -Financial resources -Peer pressure (advertising for products, what you see others buy) -Scarcity (not enough resources to fulfill our needs) -Wants and Needs

WHY PERSONAL FINANCE GOALS ARE IMPORTANT? -Good financial behavior reaps many benefits: -Security -Ability to achieve goals -Less worry about finances -If bad financial behavior occurs the following can happen: -Bankruptcy -Debt -Job less -Inability to pay bills