Life Cycle of Financial Planning “Take Change of Your Finances”

“Every follows the same financial plan.” Is this statement True or False Why or Why not?

“Not True!” Everyone’s financial planning is different Financial planning is a tool used to achieve financial success based upon the development and implementation If financial goals.

Examples of lifestyle conditions. Marital statues – single, married, divorced Employment status – employed, unemployment Age Number of dependents – children, spouse Economic outlook – interest rates, employment level, salary rates Education – education level of family members, tuition needs Health status

An Individual's Financial Life Cycle Stage 1: Basic Wealth Protection Start family, beginning earning money Stage 2: Wealth Accumulation Peak earning years, accumulating wealth, getting ready for retirement Stage 3: Wealth Distribution Retirement, consumption of wealth, estate planning Single * Married * Start and Raising Family * Approaching * Retirement Retirement Years Stage 3 Stage 2 Stage 1:

Personal Financial Management Pyramid Basic Wealth Protection – quit giving to others Cash management Credit and Debt Management Risk and Tax Management Wealth Accumulation – give it to others Building Financial Security Wealth Distribution – give it to your chosen ones Estate planning

Building a Solid Financial Foundation Build wealth to move up. Decisions at one level affect the other levels On the way up, financial plan becomes more complex

Activity Time Divide into seven groups based on stages Brainstorm activities and events which require financial planning for that stage and age group Write them on the paper Share response

Ages 13 - 17 Developing a plan for eventual independence Preparing for career Evaluating future financial needs and resources Exploring financial systems - banks, etc. Developing a personal system of record keeping

Ages 18 - 24 Establishing a household Training for a career Gaining financial independence Determining insurance needs Establishing credit Establishing savings Creating a budget Developing a personal financial identity Developing a record keeping system Developing a personal financial system

Ages 25 - 34 Child-bearing Child-raising Education funds started Expand career goals Manage increased need for credit Training expenses Additional insurance needs Draw up will Maximize financial management by all members of household

Ages 35 - 44 Upgrade career training Build education finds Head-of-household protection needs Need for greater income due to expanding needs Establish retirement goals

Ages 45 - 54 Higher education for children investments Update retirement plans Estate plans

Ages 55 - 64 Consolidate assets Future security Re-evaluate property transfer (estate) Investigate retirement part-time income or volunteer work Evaluate expenses for retirement and current housing Meet responsibilities of ageing parents

Ages 65 - over Re-evaluate and adjust living conditions and spending as related to health and income Adjust insurance programs for increasing risks Acquire assistance in management of personal and financial affairs Finalize estate plan Finalize will or letter of last instruction

Scenario – 4 financial goals & list resource Sally Smith is a 16 year-old high school junior. She values her close family and dreams of having a family of her own someday. She is also very focused on having a successful career in the future. Remember the 5 elements of a financial goal

Discussion How does this scenario compare to you? What financial plan goals are could apply to you? What other financial plan goals are applicable to HS students? Name some personal values and goal which affect HS student’s financial plans. List resources. Why is it important for you to start financial planning now?

Personal Life Cycle of Financial Planning Complete the worksheet Hand in