NEFE High School Financial Planning Program Unit One - Your Financial Plan: Where It All Begins Good Morning! Objective: Define the purpose of Decision Making and creating a Financial Plan Do Now: Complete the SMART Goals handout To Be Discussed

NEFE High School Financial Planning Program Unit One - Your Financial Plan: Where It All Begins 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 Alternatives Consequences Opportunity Cost Risk Financial Planning also means.... Decision Making…

NEFE High School Financial Planning Program Unit One - Your Financial Plan: Where It All Begins You Know What You Want 1-M In order to make a good decision you must be informed….. What is opportunity cost? A possibility that you give up when you make one choice instead of another

NEFE High School Financial Planning Program Unit One - Your Financial Plan: Where It All Begins Opportunity Cost “Consequences of Choices” **A Trade off…... **Refers to what you give up when a decision is made or the cost of giving up one thing in order to get something that you want more; **The cost may involve your time, money, and/or effect

NEFE High School Financial Planning Program Unit One - Your Financial Plan: Where It All Begins Examples Personal: For example time spent on studying usually means lost time for hanging out with your friends Financial: For example, the purchase of an item with money from your savings means your will no longer earn interest on that money

NEFE High School Financial Planning Program Unit One - Your Financial Plan: Where It All Begins Consequences **Outcomes or results of a decision; **What will happen depending upon what you choose to do; **These are determined by your actions or lack of actions

NEFE High School Financial Planning Program Unit One - Your Financial Plan: Where It All Begins Alternatives **Choices…. **Different ways to solve a problem; **Opportunities to choose between several courses of action

NEFE High School Financial Planning Program Unit One - Your Financial Plan: Where It All Begins Risk **The possibility that your decision will result in a negative outcome; **Taking a chance; **Risk may involve losing money

NEFE High School Financial Planning Program Unit One - Your Financial Plan: Where It All Begins Risk 1) 1)Inflation Risk 2) 2)Interest Rate Risk 3) 3)Income Risk 4) 4)Personal Risk 5) 5)Liquidity Risk

NEFE High School Financial Planning Program Unit One - Your Financial Plan: Where It All Begins Inflation Risk Inflation is the rise in the level of prices for goods and services over time Inflation Risk: If you wait to buy a car until next year, you accept the possibility that the price may increase

NEFE High School Financial Planning Program Unit One - Your Financial Plan: Where It All Begins Interest Rate Risk Interest is the price that is paid for the use of another’s money Interest Rate Risk: Interest rates go up and down, which may affect the cost of borrowing or the profits you earn when you save or invest

NEFE High School Financial Planning Program Unit One - Your Financial Plan: Where It All Begins Income Risk Income Risk – you may lose your job due to unexpected health problems, family problems, an accident, or changes in your field of work Prepare and save – build up 3-4 months of savings to cover cost of living

NEFE High School Financial Planning Program Unit One - Your Financial Plan: Where It All Begins Personal Risk Personal Risk – Driving for eight hours on icy mountain roads may not be worth the money you would save on airfare.

NEFE High School Financial Planning Program Unit One - Your Financial Plan: Where It All Begins Liquidity Risk Liquidity is the ability to easily convert your financial resources to cash without a loss in value Liquidity Risk: Some long-term investments, such as a house or an antique doll collection, can be difficult to convert to cash quickly.

NEFE High School Financial Planning Program Unit One - Your Financial Plan: Where It All Begins Other Influences

NEFE High School Financial Planning Program Unit One - Your Financial Plan: Where It All Begins People Other Publications Agencies Magazines and Books The Facts of the Matter… Find Advice; Find Information To make a good choice equals… Internet Wrap up on NBK