1. INTRODUCTION ACTIVITY
Please write down five items you would like to purchase. Write down the cost of each of those items as well as the benefits of purchasing them.
ITEMS COST BENEFIT 1. 2. 3. 4. 5.
Questions?
How much time do you think it will take to save the money for each?
How can this activity be considered financial planning?

2. Personal Financial Planning
Chapter 3

3. Personal Financial Decisions
Chapter 3 Section 1: Part I
Personal Financial Decisions

4. What is Personal Financial Planning?
Arranging to spend, save, and invest money.
Live comfortably
Financial security
Setting goals

5. Benefits of Personal financial planning
Ability to protect financial resources throughout lifespan
Control of finances
Improved personal relationships
Freedom from financial worries

6. 6-Step Financial Planning process

7. Step 1: Determine financial situation
Savings
Monthly income
Monthly expenses
Debts
Keep a record of purchases

8. Step 2: Develop financial goals
Prioritize needs and wants
Save now?
Spend now?
Determine your values

9. Step 3: Identify alternatives
Continue same practices
Expand practices
Change situation
Take a new course of action

10. Step 4: Evaluate alternatives
Examine life situation (conduct research)
Determine risks
Inflation
Interest
Income
Personal
Liquidity

11. Step 5: Create and use plan
List of ways to achieve financial goals

12. Step 6: Review and Revise your plan
Finances change

13. Personal Financial Decisions
Chapter 3 Section 1: Part II
Personal Financial Decisions

14. Types of financial goals
Based on time and need
Time
Short-Term: one year or less
Intermediate: two to five years
Long-Term: more than five years

15. Guidelines for goal setting
Your financial goals should be. . .
Realistic
Specific
In a clear time frame
Able to help you decide what type of action to take

16. What would be some influences to your financial planning?

17. Influences on financial planning
Life situations
Personal values
Economic factors

18. Life situations and Personal Values
Careers
Marriage
Children
Move to a new city
What do you want out of life?

19. Economic Factors and conditions
Market – forces supply and demand, consumer prices (inflation)
Financial Institutions – increase financial activity in the country, consumer spending
Global Influences – global market place, foreign countries, interest rates