Your Financial Plan: Where It All Begins Unit 1B

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

The 5-Step Financial Planning Process

Sample Wants and Needs NEEDS  Food  Clothing  Transportation  ______________ NEEDS  Food  Clothing  Transportation  ______________ WANTS  An iPod  DVD Players  Cell Phone  Car  ______________ WANTS  An iPod  DVD Players  Cell Phone  Car  ______________ 1-C

ValuesValues  Getting a good education  Religious faith or beliefs  Social causes  Handling money responsibly  Friendships / The people I hang out with  ____________________________  Getting a good education  Religious faith or beliefs  Social causes  Handling money responsibly  Friendships / The people I hang out with  ____________________________ 1-D

Goals  You can’t hit a target you cannot see.  The basic rules:  Goals must be written down  Realistic plans must be made for their accomplishment  Deadlines must be set and honored  Goal setting is an art that makes everything else possible.  Most successful people are obsessive goal setters. set  Once you have goals set, you have a pattern for opportunity  You can’t hit a target you cannot see.  The basic rules:  Goals must be written down  Realistic plans must be made for their accomplishment  Deadlines must be set and honored  Goal setting is an art that makes everything else possible.  Most successful people are obsessive goal setters. set  Once you have goals set, you have a pattern for opportunity

Goals  Successful people have a perfect balance between thought and action  You must think before you act but you have to act  Don’t be afraid to take a risk  Failure is inevitable  It just should not be linked with giving up  How many chances do you give a baby to walk before you stop them from trying?  Successful people have a perfect balance between thought and action  You must think before you act but you have to act  Don’t be afraid to take a risk  Failure is inevitable  It just should not be linked with giving up  How many chances do you give a baby to walk before you stop them from trying?

Goals  Problem with achieving goals is that we fall apart once we achieve our goal example: dieting  Rewards of goal setting come not from earning $1 million but in having learned the lessons about what it takes to become a millionaire  Problem with achieving goals is that we fall apart once we achieve our goal example: dieting  Rewards of goal setting come not from earning $1 million but in having learned the lessons about what it takes to become a millionaire

Term Goals 1-E Short-Term Goals Within 3 monthsWithin 3 months Intermediate-Term 3-12 months3-12 months Long-Term Goals More than a yearMore than a year

Delayed Gratification  Saving money over time to make a major purchase.  Waiting to buy a new product until the price goes down.  Waiting to see the latest movie until the crowds get smaller and the lines shorter.  Saving money over time to make a major purchase.  Waiting to buy a new product until the price goes down.  Waiting to see the latest movie until the crowds get smaller and the lines shorter. 1-F

S-M-A-R-T GOAL CRITERIA 1-GSpecific I will pass personal finance this summerI will pass personal finance this summer Measureable I will know I have met my goal when I get my report cardI will know I have met my goal when I get my report card Attainable If I study hard and turn in all work, I will passIf I study hard and turn in all work, I will pass Realistic IF I pay attention during class, I’ll get all the information to complete homeworkIF I pay attention during class, I’ll get all the information to complete homework Time-Bound I’ll evaluate my goal after our first testI’ll evaluate my goal after our first test

$35.00 $5.00 $15.00 $6.00 $4.00 $7.00 $8.00 $15.00 $40.00$55.00 $ I Spending Record

Factors That Affect Decision Making AgeWants/NeedsFamilyTime MoneyValuesHabitsMotivation CultureSocietyEducationAttitude

The Decision- Making Process EvaluateResults Make a Decision Identify Your Goal Weigh Pros and Cons EstablishCriteria Monitor & Modify the Plan Implement Set Goals Create a Plan AnalyzeInformation The Financial Planning Process Decision Making and Financial Planning 1-L NEFE High School Financial Planning Program Unit One - Your Financial Plan: Where It All begins

The Decision-Making Process

Remember…   Reality   Responsibility   Restraint   Saving   Spending   Sharing The 3 R’s The 3 S’s