Unit 1: The Financial Planning Process

I can…• Learning Objectives• I can explain why personal financial planning is so important.• I can describe the five basic steps of personal financial planning.• I can set short, intermediate, and long term goals.• I can explain how career management and education can determine

income level.• I can calculate monthly income using hourly, overtime, and

commission based rates.• I can create a resume.• I can create a cover letter.• I can explain appropriate interview attire for a male and female.• I can list what to do before, during, and after an interview.

Financial planning allows you to accomplish the following:

• Manage the unplanned– Plan to deal with the unexpected– Allows you to bounce back from a hard knock instead of

going down for the count• Accumulate wealth for special expenses– Maps out strategies for travel, a big wedding, college for

you or your children, or buying a home• Save for retirement– You do not want to be penniless at 65– Planning will help you live a life of retirement ease.

Financial planning allows you to accomplish the following (cont.):

• “Cover your assets”– Protect what you’ve got

• Invest intelligently– Providing basic principles of investment for smart

investing• Minimize your payments to Uncle Sam:– Helps you legally reduce the amount of tax you

have to pay

The five basic steps to personal financial planning…

• Step 1: Evaluate Your Financial Health• Step 2: Define Your Financial Goals• Step 3: Develop A Plan of Action– Flexibility– Liquidity– Protection– Minimization of Taxes

• Step 4: Implement Your Plan• Step 5: Review Your Progress, Reevaluate, and Revise

Your Plan

Establishing Goals

• Short-term- can be accomplished in a one year period – Example: new shoes, television, taking a vacation

• Intermediate term- may take from 1 year to 10 years to accomplish– Saving for college, a new car, a home, a wedding

• Long term- takes more than 10 years to accumulate money – A second home, retirement

Financial Life Cycle

• Stage 1: Early Years- time for wealth accumulation (through age 54)

• Stage 2: Approaching Retirement- the Golden Years (ages 55-64)

• Stage 3: The Retirement Years (age 65 and older)

• Estate planning- planning for your eventual death and the passage of your wealth to your heirs

• Inflation- an economic condition in which rising prices reduce the purchasing power of money

What are your financial goals?

Bellringer

• Write the question and answer on a scratch piece of paper. We will turn these in later.

• How do YOU feel career choices impact your financial health? Explain using 2 or more sentences.

Research Shows…

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High Sc

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College

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Average Yearly Income

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Research Shows…

High School Diploma

Bachelors Degree Masters Degree Doctoral Degrees0

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2.5

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3.5

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What A Difference A Degree Makes

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