Personal FinanceUnit 1

INCOME

                                     

“Most people don’t plan to fail. They simply fail to plan.”

What is financial planning?

More than budgetingMore than investingFinancial planning is a

thinking process that help achieve goals.

How do you build a house?

Floor planGather

resourcesConsider

optionsTake action

Questions You Will Answer:

What are the five steps in the personal financial process?

How do you set “SMART” goals?How do your choices affect your

money?How can money help you live a

satisfying life?

Quotes to Consider

“Most people don’t plan to fail. They simply fail to plan.”

“If you don’t know where you are going, any road will take

you there.”

Can You Believe…

Only ___% of teenagers have ever made a written plan for their money.

In a national survey, ___% of teenagers thought earnings from a savings account might not be taxed.

Can You Believe…

___% of teenagers surveyed thought you had no responsibility at all to repay fraudulent charges on a credit card.

___% of teenagers surveyed said they put some money in savings when they receive an allowance or earn some money.

Can You Believe…

___% of teenagers are likely to go to their parents for financial information.

___% of teenagers consider themselves to be spenders rather than savers.

Financial Planning Process

                                                                                          

STEP 1

Set Goals

NEEDS vs WANTS

NEEDS–Essentials…the basics of life

–Food–Clothing–Shelter

NEEDS vs WANTS

WANTS–Simply increase the quality of living

Assignment 1.1page 4

“My Needs and Wants: Can I Tell the

Difference”

Values

FamilyFriendsTeachersChurchWork

The beliefs and practices in your life that are very important to you.

Assignment 1.2My Values

Page 5

SpecificMeasurable

Attainable Realistic

Time-bound

SMART Goals Timelines

Short Term– Up to three months

Intermediate Term– Three months to one year

Long Term– Longer than one year

•DELAYED GRATIFICATION

Assignment 1.3My SMART GoalsPage 7

Save $25 so I can take my friend out for pizza.

1st of next month

Short term $25.00 $7.50

$25.00 $7.50

Step 2

Analyze Information

Cash Flow

A measure of the money you receive and the money you spend.

Assignment 1.4Personal Spending Record Page 8

Step 3

Create A Plan

Decision Making

The process of considering and analyzing information in order to make a decision.

Factors that Can Influence Your Goal Setting and Decision Making

Opportunity Cost

Choosing one option may mean giving up altogether another goal.

It’s a tradeoff!

Assignment 1.5My Decision

Pros Cons

Step 4

Implement the Plan

Three Rs of Money

RealityResponsibilityRestraint

Step 5

Monitor and Modifythe Plan

Monitor and Modify

Are your existing goals still worth doing?

Is there a new goal to add to your list?

Is there an existing goal you want to drop or change?

ACTION STEPS

Page 14Write down two BIG GOALSWrite the first and second

step for each goal

Questions To Answer:

What are the five steps in the personal financial process?

How do you set “SMART” goals?How do your choices affect your

money?How can money help you live a

satisfying life?

2001 National Endowment for Financial Education, Greenwood Village, Colorado, 80111