1. M ONEY M ANAGEMENT - F INANCIAL P LANNING Financial Literacy

2. F INANCIAL P LANNING Many people follow a similar financial pattern during their life BUT Everyone has an individualized financial plan

3. Financial Planning W HAT INFLUENCES A PERSON ’ S FINANCIAL PLAN ? Many factors that can be expected or unexpected: Values, Goals, & Personal Choices Life Cycle Needs Major Life Events Lifestyle Conditions

4. Choose Financial Goals Track Current Income & Expenses Create Categories & Allocate $ to Each Implement & Control Evaluate & Make Adjustments The Planning Process

5. F INANCIAL P LANNING Financial planning - a tool used to achieve financial success based upon the development and implementation of financial goals Financial goals - specific objectives to be accomplished through financial planning Financial Goals should be SMART goals

6. SMART F INANCIAL G OALS S pecific M easurable A ttainable R ealistic T ime Bound State exactly what is to be done with the money involved Write the exact dollar amount Determine how it can be reached, which is often determined by the individual’s budget Do not set the goal for something unattainable or unrealistic Specifically state when the goal needs to be reached

7. C HOOSE F INANCIAL G OALS Types of Financial Goals Short-term Goals – within one year Long-term Goals – longer than one year Life-span Plan – includes everything The Budget Process

8. H OW WILL THINGS CHANGE ? Age Group Activity High School 13-17 Young Adult 18-24 Adult – w/ or w/o children 25-34 Working Parent or Adult 35-44 Midlife 45-54 Pre-Retirement 55-64 Retired 65 and older

9. C OMPONENTS OF A S PENDING P LAN

10. W HAT DO YOU THINK ? Financial success depends on luck more than planning.

11. W HAT DO YOU THINK ? Spending small amounts of money now will not affect your life-span financial success. Budgeting is balancing your short-term spending for long-term success.

12. W HAT DO YOU THINK ? Your spending decisions do not affect anyone but yourself. Family Current family Future family Community

13. C OMPONENTS OF A S PENDING P LAN Gumball machine represents components of the financial planning process Income - money earned Gumballs going into the machine Wages from a job, allowance, gifts

14. C OMPONENTS OF A S PENDING P LAN Expense - money spent Money going out of the gumball machine Fixed expenses - may have a fixed amount due each month and are contractual Flexible expenses -can vary each month in the amount owed and are not contractual

15. S PENDING P LAN A CTIVITY Decide if each item would be: income a fixed expense a flexible expense

16. S PENDING P LAN A CTIVITY Paying Rent Fixed expense Wages Income

17. S PENDING P LAN A CTIVITY Groceries Flexible expense Internet bill Fixed expense

18. S PENDING P LAN A CTIVITY Tips Income or Flexible Expense Utilities Fixed Expense or Flexible Expense

19. S PENDING P LAN A CTIVITY Gifts Income or Flexible Expense Savings Fixed Expense, Flexible Expense or Income

20. S PENDING P LAN A CTIVITY Automobile registration Fixed expense Eating out/Snacks Flexible expense

21. S PENDING P LAN A CTIVITY Scholarships Income Hobbies Flexible expense or Income

22. S PENDING P LAN A CTIVITY Cell Phone Bill Fixed expense but amount may be flexible Movies Flexible expense

23. 1 - Choose Financial Goals 2 - Track Current Income & Expenses 3 - Create Categories & Allocate $ to Each 4 -Implement & Control 5 - Evaluate & Make Adjustments The Planning Process Steps 1-3 help develop a spending plan Steps 4 & 5 help maintain a spending plan