1. Money Management Freshman Seminar – Introduction to Business Bishop Kearney High School Dr. Hays December 8, 2009

2. Managing Personal Finances Personal finances refer to all things in your life that involve money –Give examples Financial planning is a necessity What is it? –spending, saving, and investing your money so you can enjoy the kind of life you want Financial Goals –Different for each person based on what each wants to accomplish College education Buying a car Starting a business

3. Financial Planning Process Six steps –Determine financial situation –Develop financial goals –Identify possible courses of action –Evaluate your alternatives –Implement financial plan of action –Review and revise your plan

4. Determine Financial Situation How? –Make list of savings –Monthly income (job earnings, allowance, tips, gifts, interest on savings accounts) –Monthly expenses (all money you spend) –Debts (money you owe to others)

5. Develop Financial Goals Think about your attitude toward money Ask yourself these questions: –Spend now or save for future? –What are your wants and needs? –Get a job after high school or go to college?

6. Identify Course of Action and Evaluate Alternatives Think about your options before deciding When evaluating alternatives, evaluate sources of financial information available Consider: –Where you are in life –Present financial situation –Personal values –Consequences and risks of each decision made Financial goals will help determine best option!

7. Implement Financial Plan and Review and Revise as Needed Three Steps List ways to achieve financial goals Remember: As you get older, finances and needs will change Look at plan every year

8. Sources of Financial Information Internet Magazines Newspapers Banks Stock Brokers

9. Understanding Risk When making financial decisions, you accept risk Types of risk: –Inflation risk – general increase in cost of goods and services –Interest rate risk – rise and fall, affects cost of borrowing –Income risk – may rise or fall, lose your job, get sick, or find new job and get a raise –Personal risk – some choices increase risk –Liquidity risk – ability to convert financial resources into cash easily without loss in value

10. Consequences of Choices What are the consequences of your financial decisions? –Opportunity Costs: What you give up when you make one choice instead of another Choosing between alternatives involves more than just knowing what you forgo Also involves know what you gain