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02 Your PFP and Your Goals

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  • *Personal Finance: Another PerspectiveYour Personal Financial Plan and Personal Goals

  • *Learning ObjectivesA. Understand the role of personal financial planning in achieving your goalsB. Understand the requirements of your Personal Financial PlanC. Understand what you want to accomplish in lifeD. Understand the principles of effective goal setting

  • *Your Personal Financial PlanSection I: IntroductionGet a binder with a clear cover TODAY!Get a family picture or one of you doing something you enjoy and put it on the coverPersonalize this binder with a heading, i.e. Personal Financial Plan of . . . . and make it yoursGet 16 tabs for each of the 16 sections listed in the Financial Plan Roadmap (TT01)Label the tabs (use printed and not hand-written or numbered tabs)Avery 11453, 11417, or 23285 printable tabs are good and easy

  • *Your Personal Financial PlanSection II: GoalsWhat does Heavenly Father want you to do or be?Be detailed, specific, and complete?What are your top three major goals?Be detailed, specific, and complete?Write your epitaphAction Plan:Short-term goals (1 year or less)Medium-term goals (2-10 years), and Long-term goals (10-80 years)

  • *Understand the Role of Personal Financial PlanningWhat is the Purpose of Financial Planning?To help you use your resources more wisely to help you achieve your personal goalsIt will help determine where you are, where you want to be, and how you will get thereWill Financial Planning help you make more money?It may not, but it will help you in your Stewardship and Accountability areas:How to be better stewards How to make better choices

  • *The Role Financial Planning (continued) Why Isnt Personal Financial Planning Easy?Some are uncomfortable discussing financial matters, i.e., the fear of financeAs you learn, you will get over itMotivation and time is required to complete an accurate planThe class (and future grade) may help your motivationGood record keeping is necessary both before and during the planning periodWe may be able to help

  • *The Role Financial Planning (continued) What Can You Accomplish As a Result of Financial Planning and This Course?Manage the unplannedAccumulate wealth for special purposesSave for retirementCover your assetsInvest intelligentlyMinimize your payments to Uncle SamWhat is our ultimate goal?To become better, more financially self-reliant, and more Christ-like stewardsAnd to be able to help others do the same

  • *The Role Financial Planning (continued)President Ezra Taft Benson counseled:Plan for your financial future. As you move through life toward retirement and the decades which follow, we invite all . . . to plan frugally for the years following full-time employment. Be even more cautious . . .about get-rich schemes, mortgaging homes, or investing in uncertain ventures. Proceed cautiously so that the planning of a lifetime is not disrupted by one or a series of poor financial decisions. Plan your financial future early; then follow the plan. (italics added, To the Elderly in the Church, Ensign, Nov. 1989, 4).

  • *Questions?Do you understand the role of personal financial planning in helping you to achieve your goals?

  • *Understand the Requirements for your Personal Financial PlanWhat is a Personal Financial Plan?It is a document that contains all critical areas of your personal financial lifeIt is your individual and personal roadmap for achieving your personal and family goalsIs there a process to follow to put together your Personal Financial Plan (PFP)?

  • *Step 1: Decide What You WantWhat do you need to decide?You must decide what is truly important to you?What do you feel Heavenly Father wants you to do or be?What would you like to be remembered by?What do you want to do with your life?These are probably the most important questions you will answer here at BYU

  • *Step 2: Evaluate Your Financial HealthWhy evaluate your financial health?To determine where you are now financially If you dont know where you are, how can you determine how to get where you need to be?To understand your current situation in regards to income, spending, and wealth?Are you financially healthy?To assess your whole financial pictureAre you solvent?If you are, you are doing better than most students!

  • *Step 3: Define your Personal and Financial GoalsWhy define your personal goals?You will achieve what you set your mind toWrite your goals downAttach a cost to each goalWhat are the costs (time, money, and effort)?Determine potential obstaclesWhat will you do to avoid those obstacles?Set a date for when they are to be completedWhen can the goal can be reasonably accomplished?Make your goals SMART: Strategic, measurable, achievable, realistic, and time-bound

  • *Step 4: Develop a Plan of ActionWhy develop a plan of action?You must know what you should work on. Your plan should be:Flexible: It should be able to change as your situation in life changesLiquid: It should have the ability to convert non-cash assets into cash with relative easeProtective: It should be able to meet the unexpected large expenses without difficultyTax Friendly (i.e. minimize taxes): It should pay Uncle Sam all that is owed and no more

  • *A Plan of Action (continued) How do you consider future needs?Develop a spending plan or budgetPlan for big-ticket purchasesPlan for managing debtPlan for insuranceDetermine your investment plan and investment strategies and follow that planPlan for the expense of children and collegePlan for retirement, and then live your planPlan for estate transfer

  • *Step 5: Implement Your PlanHow do you implement the plan?Use common sense and moderationDont force yourself to track every pennyUse wisdom in your planRemain positive about your planYour Plan is a goal to set your sights by, not a stick to beat yourself withStay on track after the detoursDetours come to allGood things come to those who hang in there!

  • *Step 6: Revise Your Plan as NecessaryWhy is re-evaluation so important?Because people and goals changePeriodically review your progress Fine tuning is necessary with every planMake sure that your plan still matches your goalsReview your goals annually at a minimumBe prepared to start over if your plan no longer meets your needsRemember your plan is etched in paper, not in stone

  • *Your Personal Financial PlanWhat will we do in this class?In this class we will do Steps 1- 4:Step 1: Decide what you want out of life. Articulate your personal/family goalsStep 2: Evaluate your financial healthStep 3: Define your personal and financial goalsStep 4: Develop a plan of action and start living your plan todayGet a 1-2 binder and put in tabs for 16 sections. Get a fun picture of yourself or your family, and put it on the cover

  • *QuestionsDo you understand the requirements for your Personal Financial Plan?

  • *C. Understand What you Want to Accomplish in LifeOnce you have a correct perspective and understand the key principles of wealth, the next important step is to understand and set your personal goals--the things you want to accomplish in life.The purpose of this section is to give you a few ideas which may be helpful as you seek to understand what you want to accomplish in lifeGoals are the future yeses in life that can give you strength to say no to the current challenges that you have to spend each day

  • *Personal Goals (continued)Jessie B. Rittenhouse wrote:

    I bargained with Life for a Penny, and Life would pay no more,However I begged at evening, When I counted my scanty store.For Life is a just employer, He will give you what you ask,But once you have set the wages, Why, you must bear the task.I worked for a menial's hire, Only to learn, dismayed,That any wage I had asked of Life, Life would have willingly paid. (Napoleon Hill, Think and Grow Rich, p.40)

  • *Personal Goals (continued)What do you want out of life? If you cannot truly answer that question, you will likely go through life not knowing which way to go, and you will likely set your wages too lowYou will spend your money on lots of different things trying to determine what makes you happyAnd unless something changes, you will be disappointed in life for the penny (or the things) you receive

  • *Personal Goals (continued)The gospel gives us wonderful direction in our lives, if we will let it. It has made a major difference in my personal life We have taught our children to pray every night and morning:Help me to stay worthy, to go on a mission, be married in the temple, to go to college, to raise righteous families, to have good marriages, to choose good friends, and to listen to and obey the promptings of the Holy Ghost.It has helped my family and me set our major goals within the context of the restored gospel

  • *Personal Goals (continued)President Ezra Taft Benson said: Every accountable child of God needs to set goals, short- and long-range goals. A man who is pressing forward to accomplish worthy goals can soon put despondency under his feet, and once a goal is accomplished, others can be set up. Some will be continuing goals. . . Now there is a lifetime goalto walk in his steps, to perfect ourselves in every virtue as he has done, to seek his face, and to work to make our calling and election sure. (Ezra Taft Benson, Do Not Despair, Ensign, Nov. 1974, 65).

  • *Personal Goals (continued)Elder M. Russell Ballard said:I am so thoroughly convinced that if we dont set goals in our life and learn how to master the techniques of living to reach our goals, we can reach a ripe old age and look back on our life only to see that we reached but a small part of our potential. When one learns to master the principles of setting a goal,

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