1. Financial Planning
Your Roadmap

2. They simply fail to plan
What does this mean?
Most people don't plan to fail
They simply fail to plan

3. What road are you on?
What road are
YOU on?

4. Values
The beliefs and practices in your life that are important to you.
Reflect your upbringing
Change little without constant effort
Family
Friends
Work
Honesty
Self-Reliance
Independence
Religion

5. Financial Values
Values strongly influence our spending habits. We don’t usually spend our money on things we do not feel are important. Typically, the more important something is, the more we are willing to spend on it.

6. NEEDS vs WANTS NEEDS Essentials…the basics of life Food Clothing
Shelter

7. NEEDS vs WANTS
WANTS
Simply increase the quality of living

8. What is a goal?
A written statement of something a person wants or needs to accomplish.
Examples
Graduate from high school
Earn a college degree
Buy a car
Get a job
Lose 15 pounds

9. Why Set Goals?
Would you set out on a cross-country adventure without a road map?
Setting goals are like a road map
Provide direction
Focus on the important things
Keep end results in mind

10. Michael Phelps won the gold medal and set a world record in the Men’s 200 meter freestyle with a one minute seconds

11. Time-bound Goals Short Term Goals Long Term Goals
Present to 6 months
Improve grades at school
Make the basketball team
Long Term Goals
6 month and longer
Attending college
Buy a new car
THIS WILL VARY AMONG RESOURCES

12. Realistic- Do not set goals for something unrealistic
Smart Goals
Specific- State exactly what is to be done with the money.
Measurable-Write the exact dollar amount
Attainable- How can it be reached
Realistic- Do not set goals for something unrealistic
Time-bound- When will the goal be met

13. What’s Missing?
Financial Goal #1: I plan to save $5,000 for college living expenses in four years.
Attainable
Financial Goal #2: I plan to save for a new computer by saving $150 each month for one year.
Measurable
Financial Goal #3: I plan to save $2,500 by saving $105 each month for 2 years
Specific

14. What’s Missing? (continued)
Financial Goal #4: I plan to save $1,500 to buy a used car by saving $75 from each paycheck.
Time Bound
Financial Goal #5: I plan to save $2,000 to pay for a new computer by saving my whole paycheck for the next 6 months
Realistic

15. Decision Making
The process of gathering and analyzing information in order to make a decision.

16. Factors that influence Decisions
Values
Peers
Habits
Consequences
Family
Age
Feelings (love, rejection, anger)
Risks

17. Steps for Decision Making
Set Goals
Analyze Information
Create a Plan
Implement the Plan
Monitor and Modify the Plan
Source: NEFE

18. The 3 Rs of Money Reality –Limited amount of time and money to use
Responsibility- Handle money wisely
Restraint – Save your money for a future goal.

19. Types of Influences on Financial Behavior
Cultural
Language, the way someone is raised, geographic location.
Social
Peer pressure, fads, marketing, advertising
Emotional
Binge spending, comfort shopping, fear of making a decision

20. Peer Pressure
The influence others have on an individual’s personal decisions.

21. Forms of Peer Pressure as it Relates to Purchasing Decisions
Friends
Newspapers
Magazines
Telephone Directories
Direct Mail
Commercials
Catalogs
Radio Advertisements

22. Emotional Factors Related to Peer Pressure
Gossip
Acceptance
Disapproval
Insecurities
Boyfriend/Girlfriend
Sarcasm
Fear
Clubs
Athletics
Cliques
Rich/Poor

23. Scarcity
“Scarcity is an economic principle stating that because of limited resources, an economic system cannot possibly produce all the goods and services that people want; therefore, choices must be made about how the limited resources will be used.”
-Consumer Economics & Education, Glencoe, 2003

24. Marketing, Advertising and Sales Strategies/Techniques
People who sell products and services are fishing for customers. They lure them in with sales, coupons, and other enticements. Unlike fish, consumers can benefit in this situation – if they know how to take advantage of special purchasing opportunities.

25. Examples of Marketing, Advertising and Sales Strategies
Clearance Sales
Holiday Sales
Coupons
Rebates
Sweepstakes
Contests
Sales People
Attractive Décor
Background Music
Items purchased most often are in back of store (bread/milk)
Most profitable items are given prominent positions.

26. Opportunity Cost
Refers to what a person gives up when a decision is made.
This cost, often called a trade-off, may involve one or more of your resources:
Time
Money
Effort
Watch Opportunity Cost Clip

27. Financial Planning The process of: defining goals
developing a plan to achieve them
Putting the plan into action

28. Benefits of Having a Financial Plan?
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.
You can help your partner and support children if you have a family.

29. How do I make a Financial Plan?
Determine your current financial situation.
Make a list of items that relate to your finances:
Savings/Investments
Monthly Income (Job Earnings, Allowance, Gifts, Interest)
Monthly Expenses
Debts

30. How do I make a Financial Plan?
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 decisions?

31. How do I make a Financial Plan?
Identify your options.
Expand the current situation.
Change the current situation.
Start something new.
Continue the same course of action.

32. How do I make a Financial Plan?
Evaluate your alternatives.
Consider the risks and consequences of each decision you make.
Be aware of all sources of financial information.
Evaluate consequences of choices, both good and bad.
Understand risks involved with choices.

33. How do I make a Financial Plan?
Create and use your financial plan of action.
Just DO it!

34. How do I make a Financial Plan?
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.