1. Life Cycle of Financial Planning
Take Charge of Your Finances

2. Financial Planning
Many people follow a similar financial pattern during their life
BUT
Everyone has an individualized financial plan.
Financial planning is a tool used to achieve financial success based upon the development and implementation of financial goals.

3. Financial Plan Influences
Financial planning is influenced by many factors:
Values, Goals & Personal Choices
Major Life Events
Lifestyle Conditions
Life Cycle Needs
These factors can be expected and unexpected.

4. An essential step to creating a financial plan
Financial Goals
Financial goals are specific objectives to be accomplished through financial planning
Financial goals should be SMART goals:
Specific
Measurable
Attainable
Realistic
Time Bound
An essential step to creating a financial plan

5. SMART Financial Goals Specific Measurable Attainable Realistic
State exactly what is to be done with the money involved.
Specific
Write the exact dollar amount.
Measurable
Determine how it can be reached, which is often determined by the individual’s budget.
Attainable
Do not set the goal for something unattainable or unrealistic.
Realistic
Specifically state when the goal needs to be reached.
Time Bound

6. Lifestyle Conditions Marital status Employment status Age
Single, married, divorced, widowed
Employment status
Employed, unemployed, facing unemployment
Age
Age of all family members
Number of dependents
Children, spouse, parents, other family
Economic outlook
Interest rates, employment level, salary rates
Education
Education level of family members, tuition needs for children
Health status
Health of all family members
Income
Amount of income

7. Financial Life Cycle
A life cycle is a series of stages in which an individual passes during his or her lifetime
There is a typical life cycle pattern that applies to most people
Includes three stages
The amount of time it takes to move through the financial life cycle varies for every individual

8. An Individual’s Financial Life Cycle$
Approaching
Retirement
Years
Retirement Years
Single * Marriage * Start and Raise Family 20 30 40 50 60 70 80
Years of Age
Stage 1: Basic Wealth Protection
Stage 3: Wealth Distribution
Stage 2: Wealth Accumulation

9. An Individual’s Financial Life Cycle
Stage 1: Basic Wealth Protection
In this stage, the individual should be focusing on building financial security.
Stage 2: Wealth Accumulation
In this stage, the household head has reached peak earning years, is accumulating wealth, and approaching retirement.
Stage 3: Wealth Distribution
This stage involves the consumption of wealth, usually during retirement

10. Personal Financial Management Pyramid
Risk and Tax Management:
goal setting, insurance, protection against
economic loss, income tax reduction
Building Long
Term Wealth:
goal setting, retirement
planning, investments
Cash Management:
goal setting, emergency, cash reserve, record keeping, spending plans, net worth, and income-expense statements
Estate
Planning
Credit and Debt Management:
goal setting, credit use, avoiding credit abuse, debt reduction
Building Financial Security:
goal setting, savings plan,
home ownership, children’s education
Wealth Distribution
‘giving it to your chosen ones’
Wealth Accumulation
‘giving it to yourself’
Basic Wealth Protection
‘quit giving it to others’

11. ACTIVITY
Directions:
On your paper write the following categories and leave enough space in between the titles to place cards into that category.
High School Ages 13-17
Young Adults Ages 18-24
Adult w/wo Children Ages 25-34
Working Parent or Adult Ages 35-44
Midlife Ages 45-54
Pre-retirement Ages 55-64
Retired Ages 65 and older
The activity cards identify life events that correspond with ONE or MORE of the age
groups on the paper. Organize these cards into the age group that BEST describes the
life cycle event.

12. Life Cycle Events Activity
People in certain age groups tend to have similar life cycle needs
What activities and events require financial planning during each stage?
High School Ages 13-17
Young Adult Ages 18-24
Adult With or Without Children Ages 25-34
Working Parent or Adult Ages 35-44
Midlife Ages 45-54
Pre-Retirement Ages 55-64
Retired Ages 65 and older
Identify someone you know in each category

13. Traditional Age Group Financial Planning Needs
High School Ages 13 – 17
Developing a plan for eventual independence
Preparing for career
Evaluating future financial needs and resources
Exploring financial systems – banks, etc.
Developing a personal system of record keeping

14. Traditional Age Group Financial Planning Needs
Young Adult Ages 18 – 24
Establishing a household
Training for a career
Earning financial independence
Determining insurance needs
Establishing credit
Establishing savings
Creating a spending plan
Developing a personal financial identity
Developing a personal financial system

15. Traditional Age Group Financial Planning Needs
Adult With or Without Children Ages 25 – 34
Child-bearing
Child-raising
Starting an education fund for children
Expanding career goals
Managing increased need for credit
Discussing and managing additional insurance needs
Creating a will
Maximizing financial management by all members of household

16. Traditional Age Group Financial Planning Needs
Working Adult or Parent Ages 35 – 44
Upgrading career training
Building on children’s education fund
Developing protection needs for head-of-household
Need for greater income due to expanding needs
Establishing retirement goals

17. Traditional Age Group Financial Planning Needs
Midlife Ages 45 – 54
Assisting with higher education for children
Investing
Updating retirement plans
Developing estate plans

18. Traditional Age Group Financial Planning Needs
Pre-Retirement Ages 55 – 64
Consolidating assets
Planning future security
Re-evaluating property transfer
Investigating retirement part-time income or volunteer work
Evaluating expenses for retirement and current housing
Meeting responsibilities of ageing parents

19. Traditional Age Group Financial Planning Needs
Retired Ages 65 and older
Re-evaluating and adjusting living conditions and spending as related to health and income
Adjusting insurance programs for increasing risks
Acquiring assistance in management of personal and financial affairs
Finalizing estate plan
Finalizing will or letter of last instructions

20. Everyone has the same financial plan.
True or False?
Everyone has the same financial plan.