Unit 1: Part A - Financial Planning
- 1. Mr. Elsesser Introduction to Financial Management
- 2. “Most people don’t plan to fail… They simply fail to plan!” Objective: Define Financial Planning Understanding the importance of setting goals and to modify and monitor Examine the value of having a plan to use money Define SMART Goals Describe decision making processes Do Now: Let’s begin with the end in mind…… Where do you see yourself in 10yrs?
- 3. What is Financial Planning? A process of setting goals, developing a plan to achieve them, and putting the plan into action. Have you heard of the terms “in the red” or “in the black” in regards to finance? “In the black” = making money “In the red” = losing money
- 6. SMART Goals Specific…….. Measurable… Attainable….. Realistic……. Time-Limited.. An Exact Statement of your desires Ex: “Pay for lodging, transportation, meals for a 5-day trip to Washington, D.C.” Defining your monetary contribution Ex: “$300 through fundraising, $50 from birthday money, save $25 a week.” Can this really be accomplished? “If I stick to my plan, I’ll have the money when I need it.” Keeping your goal feasible for your current financial situation. Ex: “I still have enough money to live on while I work toward this goal.” What is the time frame for this goal? Ex: “I need to have all the money by 6 months from now.”
- 7. Identifying Term Goals • SHORT-TERM GOALS – Within three months • INTERMEDIATE-TERM GOALS – Three months to a year • LONG-TERM GOALS – More than a year Let’s close lesson with watching a video clip
- 8. Age What Kinds of Factors Affect Needs Decision Making? Wants What about you? Family Time Money Values Habits 1-J Culture Society Motivation Education Attitudes
- 9. Wants and Needs are factors that have a direct impact on the decisions that we make. Financial planning requires you to set priorities here. WANTS: Things that you do not have to have to survive. NEEDS: Things that you must have to survive. Balancing these are crucial!!! WHY?
- 10. ACTIVITY: Identify your own wants and needs… 3 NEEDS: 1. 2. 3. 3 WANTS: 1. 2. 3. Do you see any issues here?
- 11. Decision Making and Financial Planning The Decision- Making Process Identify Your Goal The Financial Planning Process Set Goals Establish Criteria Weigh Pros and Cons Create a Plan Make a Decision Evaluate Results 1-L Analyze Information Implement the Plan Monitor & Modify the Plan