YOUR FINANCIAL PLAN: WHERE IT ALL BEGINS. “Most people don’t plan to fail… They simply fail to...
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Transcript of YOUR FINANCIAL PLAN: WHERE IT ALL BEGINS. “Most people don’t plan to fail… They simply fail to...
YOUR F
INANCIA
L PLA
N:
WHER
E IT
ALL
BEG
INS
“Most people don’t plan to
fail…
They simply fail to
plan!”
THE FIVE-STEPFINANCIAL PLANNING PROCESS
SAMPLE WANTS AND NEEDS
NEEDS WANTS
Food for breakfast An iPod
Clothes for school DVD Player
Transportation to school or work
Cell Phone
______________ Hot Car
______________ ______________
______________ ______________
VALUES
• Getting a good education• Religious faith or beliefs• Social causes• Handling money responsibly• Friendships / The people I hang out with• ____________________________• ____________________________
TERM GOALS
SHORT-TERM GOALS Within three months
INTERMEDIATE-TERM GOALSThree months to a year
LONG-TERM GOALS More than a year
DELAYED GRATIFICATION
• Saving money over time to make a major purchase.
• Waiting to buy a new product until the price goes down.
• Waiting to see the latest movie until the crowds get smaller and the lines shorter.
• ____________________________________________________________________
S-M-A-R-T GOAL CRITERIA
Specific
Measurable
Time-Limited
Realistic
Attainable
SMART Goals Examples
Specific……..
Measurable…
Time-Limited..
Realistic…….
Attainable…..
“Pay for lodging, transportation, and meals for a 5-day trip to Washington, D.C.”“I will get $300 through fundraising, $50 from birthday money, and save $25 a week.”“If I stick to my plan, I will have the money when I need it.”
“I still have enough money to live on while I work toward this goal.”“I need to have all of the money within six months from now.”
SPENDING RECORD
$35.00
$5.00
$15.00
$6.00$4.0
0$7.00
$8.00$15.00
$40.00$55.00$15.00
What about you?
FACTORS THAT AFFECTDECISION MAKING
Wants
Family
Values
TimeMoney
Needs
Habits
Motivation
Education
Age
Attitudes
SocietyCulture
EvaluateResults
DECISION-MAKING PROCESS
Make a Decision
Identify YourGoal
Weigh Prosand Cons
EstablishCriteria
EvaluateResults
Make a Decision
Identify YourGoal
Weigh Pros and Cons
EstablishCriteria
Monitor & Modifythe Plan
Implement the Plan
Set Goals
Create a Plan
AnalyzeInformation
Financial Planning
Decision-Making and Financial Planning
ProcessesDecision-Making
KNOW WHAT YOU WANT
Identify YourGoal
EstablishCriteria
Decide where to eat
1.
2.
3.
REALITYRESPONSIBILITYRESTRAINT
Your Financial Plan:Where It All Begins