1. Unit 1: Banking Section 1: Financial Decisions and Goals
Financial Literacy
Mrs. Hoke

2. Goals

3. Personal Financial Planning
Arranging to spend, save, and invest money to live comfortably, have financial security, and achieve goals.

4. Step 1: Determine your current financial situation.
GRADED TASK:
For the next two weeks keep track of EVERYTHING you spend money on and all of the money you make!
Savings
Monthly Income
Monthly Expenses
Debts

5. Step 2: Develop Your Financial Goals
Values are the beliefs and principles you consider important, correct, and desirable. (These are different for every person.)
NEED vs. WANT

6. Step 3: Identify Alternative Courses of Action
Continue the same course of action.
Expand the current situation.
Change the current situation.
Take a new course of action.

7. Step 4: Evaluate Your Alternatives
RESEARCH so that you make the BEST decision.
Common places to find research.
The Internet
Financial institutions (Banks)
Media Sources (Newspaper, magazine, TV, or radio)
Financial Specialists (Financial planners, lawyers, tax preparers)

8. FINANCIAL RISKS Inflation risk: Prices may increase
Interest Rate Risk: Interest rates go up and down
Income Risk: You may lose your job due to unexpected circumstances
Personal Risk: Risk of life and health versus saving money.
Liquidity Risk: Some long-term investments are difficult to convert to cash value quickly.
Liquidity is the ability to easily convert financial assets into cash without loss in value.

9. Step 5: Create and Use Your Financial Plan of Action

10. Step 6: Review and Revise Your Plan
Reevaluate and revise your plan yearly.