Personal Financial Planning PPT

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Unit 1
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A plan that contains personal financial goals
you want to accomplish.
A formal process of looking at your current
situation and thinking about your future.
Will require long-term commitment.
As with any plan, you will put it into action
and monitor it periodically.
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Some people will want to create their own
plan and others may use a financial planner.
Financial Planner – Professional trained to
provide advice about how to invest earnings,
plan for retirement, and manage other
financial matters.
Goal – the end result of
something a person intends to
acquire, achieve, do, reach, or
accomplish sometime in the
near or distant future
Financial goals – specific
objectives to be accomplished
through financial planning
Education goals - enable
individuals to prepare for
future success in the
workplace
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Short-term goals – specified as less than one
year
 I plan to raise my English grade from a C+ to a B by
the end of this school year by going to the writing lab
and having my research paper reviewed prior to
turning it in.
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Long-term goals – specified as more than one
year
 By the end of the next summer year I would like to
purchase my first car by saving $50 per month from
my part time job.
SMART
Goals
Specific
State
exactly
what is to
be done
Measurable
Include
how the
goal can be
measured
Attainable
Determine
steps to
reach the
goal
Realistic
Do not set
goals for
something
unrealistic
Time Bound
State
when the
goal will be
met
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Help individuals prepare for success in the
workplace
 Examples include:
▪ Earning an A on an upcoming quiz
▪ Attending college
▪ Participating in extra-curricular activities
 Include both short-term and long-term goals
 Provide guidance and direction
 Enable individuals to reach financial goals
SMART
Goals
Specific
Measurable
State exactly
what is to be
done with the
education
aspect involved
Write the
grade or
class that
the goal is
for
Attainable
Determine
how it can be
reached
Realistic
Do not set
goal for
something
unrealistic
Time
Bound
Specifically
state when
the goal
needs to be
reached
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Goal – “I want to attend college.”
SMART goal –
 Specific – I want to attend a four year college
 Measurable – Because I want to attend a four year college, I will
earn a B in algebra
 Attainable – Because I want to attend a four year college, I will earn
a B in algebra this semester
 Realistic – Because I want to attend a four year college, I will earn a
B in algebra this semester to prepare me for the college entrance
exam
 Time Bound – Because I want to attend a four year college, I will
earn a B in algebra this semester to prepare me for the college
entrance exam when I am a junior in high school
Specific
• State exactly what is to be done with the
money involved
Measurable
• Write the exact dollar amount the goal is for
Attainable
• Determine how it can be reached, which is
often determined by the individual’s budget
Realistic
• Do not set goal for something unattainable or
unrealistic
Time Bound
• Specifically state when the goal needs to be
reached
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Goal – I want to buy a new car
SMART goal –
 Specific – I plan to save for a down payment on a new car
 Measurable – I plan to save $5,000 for a down payment on a new
car
 Attainable – I plan to save $5,000 for a down payment on a new car
by saving $200 from every paycheck
 Realistic – It is realistic to save $200 from each paycheck for a
down payment on a car because I usually waste the money on
unnecessary items instead of saving it
 Time Bound – I plan to save $5,000 for a down payment on a new
car by saving $200 from each paycheck for two years.
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Find the missing element (specific,
measurable, attainable, realistic, or time
bound) in the following financial goals
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Financial Goal #1
 As a senior in high school, I plan to save $5,000 for
college living expenses in four years.
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Financial Goal #1 Answer:
Attainable
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Find the missing element (specific,
measurable, attainable, realistic, or time
bound) in the following financial goals
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Financial Goal #2
 I plan to save for a new computer by saving $150
each month for one year.
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Financial Goal #2 Answer:
Measurable
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Find the missing element (specific,
measurable, attainable, realistic, or time
bound) in the following financial goals
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Financial Goal #3
 I plan to save $2,500 by saving $105 each month
for 2 years.
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Financial Goal # 3 Answer:
Specific
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Find the missing element (specific,
measurable, attainable, realistic, or time
bound) in the following financial goals
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Financial Goal #4
 I plan to save $1,500 to buy a used car by saving
$75 from each paycheck
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Financial Goal # 4 Answer:
Time Bound
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Find the missing element (specific,
measurable, attainable, realistic, or time
bound) in the following financial goals
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Financial Goal #5
 I plan to save $2,000 to pay for a new computer by
saving my whole paycheck for the next 6 months
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Financial Goal # 5 Answer:
Realistic
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Your financial plan represents your personal
financial goals at one point in time.
Those goals are likely to change over time.
For example, you may inherit money, or you
may have a job opportunity overseas, or you
may wish to spend more time on a hobby or a
side business.
The financial plan is a work in progress; it is
never finished.
As one goal is accomplished, another personal
goal is defined.
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Beginning tomorrow you will write your own
plan.
This project will give you the opportunity to
think about your goals.
You will have 2 ½ days to complete this in the
lab.
Next Monday and Tuesday we will present
the plans to the class.
Thursday we will have our first quiz (25
questions).
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