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Unit 1: The Financial Planning Process

Unit 1: The Financial Planning Process. I can…. Learning Objectives I can explain why personal financial planning is so important. I can describe the five basic steps of personal financial planning. I can set short, intermediate, and long term goals.

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Unit 1: The Financial Planning Process

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  1. Unit 1: The Financial Planning Process

  2. I can… • Learning Objectives • I can explain why personal financial planning is so important. • I can describe the five basic steps of personal financial planning. • I can set short, intermediate, and long term goals. • I can explain how career management and education can determine income level. • I can calculate monthly income using hourly, overtime, and commission based rates. • I can create a resume. • I can create a cover letter. • I can explain appropriate interview attire for a male and female. • I can list what to do before, during, and after an interview.

  3. Financial planning allows you to accomplish the following: • Manage the unplanned • Plan to deal with the unexpected • Allows you to bounce back from a hard knock instead of going down for the count • Accumulate wealth for special expenses • Maps out strategies for travel, a big wedding, college for you or your children, or buying a home • Save for retirement • You do not want to be penniless at 65 • Planning will help you live a life of retirement ease.

  4. Financial planning allows you to accomplish the following (cont.): • “Cover your assets” • Protect what you’ve got • Invest intelligently • Providing basic principles of investment for smart investing • Minimize your payments to Uncle Sam: • Helps you legally reduce the amount of tax you have to pay

  5. The five basic steps to personal financial planning… • Step 1: Evaluate Your Financial Health • Step 2: Define Your Financial Goals • Step 3: Develop A Plan of Action • Flexibility • Liquidity • Protection • Minimization of Taxes • Step 4: Implement Your Plan • Step 5: Review Your Progress, Reevaluate, and Revise Your Plan

  6. Establishing Goals • Short-term- can be accomplished in a one year period • Example: new shoes, television, taking a vacation • Intermediate term- may take from 1 year to 10 years to accomplish • Saving for college, a new car, a home, a wedding • Long term- takes more than 10 years to accumulate money • A second home, retirement

  7. Financial Life Cycle • Stage 1: Early Years- time for wealth accumulation (through age 54) • Stage 2: Approaching Retirement- the Golden Years (ages 55-64) • Stage 3: The Retirement Years (age 65 and older)

  8. Estate planning- planning for your eventual death and the passage of your wealth to your heirs • Inflation- an economic condition in which rising prices reduce the purchasing power of money

  9. What are your financial goals?

  10. Bellringer • Write the question and answer on a scratch piece of paper. We will turn these in later. • How do YOU feel career choices impact your financial health? Explain using 2 or more sentences.

  11. Research Shows…

  12. Research Shows…

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