Reviewed by: Bob Walker
April 2003
1.0
Course Title:
Personal Financial Management
2.0
Catalog Number: FN103T
3.0
Semester Credit Hours:
3.1 Lecture Hours: 3
3.2 Lab Hours:
0
4.0
Course Description:
3
Personal Financial Management provides a comprehensive examination of the concepts
and principles of personal finance and offers solid strategies for successful management
and planning. Students will learn planning, analyzing and controlling financial resources
and developing the knowledge and skills necessary to take advantage of favorable
financial opportunities, resolve personal financial problems, achieve self-satisfactions and
strive towards financial security.
5.0
Prerequisites: None
6.0
General Course Competencies:
 Understand the importance of personal finance and planning to achieve success
 Learn how to maximize your investment dollar through tax planning and proper
investment strategies
 Be able to manage your cash and credit through budgeting and discipline
 Understand how to best use credit and maximize your purchasing power for all
purchases, including major purchase such as a home or automobile
 Minimize risk exposure through proper insurance of life, health and property, and
diversifying assets
 Maximize investment dollars in sticks, bonds, mutual funds and real estate given your
risk tolerance and investment goals
 Plan for successful retirement and estate planning.
7.0 Major Units of Instruction:
 The Importance of Personal Finance
 Financial Planning
 Managing Taxes
Reviewed by: Bob Walker
April 2003
 Budgeting and Cash-Flow Management
 Managing Your Cash
 Credit Use and Credit Cards
 Planned Borrowing
 Automobiles and Other Major Purchases
 The Housing Expenditure
 Risk Management and Property/Liability Insurance
 Health Care Planning
 Life Insurance Planning
 Investment Fundamentals and Portfolio Management
 Investing in Stocks and Bonds
 Investing Through Mutual Funds
 Buying and Selling Securities
 Real Estate and Advanced Portfolio Management
 Retirement Planning
 Estate Planning
8.0
Unit Objectives:
 The Importance of Personal Finance
o Why Study Personal Finance
o Five Lifetime Financial Goals
o Understanding the Economic Environment of Personal Finance
o Economic Considerations that Affect Decision Making
o Objectives and Steps to Successful Management of Personal Finances
o How Work Decisions Affect Success in Personal Finance
 Financial Planning
o The Components of Successful Financial Planning
Reviewed by: Bob Walker
April 2003
o Financial Statements
o Financial Ratios
o Financial Recordkeeping
o Using Computer Software in Personal Financial Planning
o What to Know About Professional Financial Planning
 Managing Taxes
o Administration and Classification of Financial Taxes
o The Marginal Tax Rate Is Applied to the Last Dollar Earned
o Who Should File a Tax Return?
o Ways to Pay Income Taxes
o Eight Steps in Calculating Your Income Taxes
o Avoid Taxes Through Proper Planning
o The IRS Audits Some Tax Returns
 Budgeting and Cash-Flow Management
o The Relationship Between Financial Planning and Budgeting
o The Financial Goal-Setting Phase of Budgeting
o The Organization Phase of Budgeting
o The Decision-Making Phase of Budgeting
o The Implementation Phase of Budgeting
o The Control Phase of Budgeting
o The Evaluation Phase of Budgeting
o Discussions about Money
 Managing Your Cash
o What is Cash Management?
o Today’s Providers of Financial Services
o Electronic Funds Transfer
o Cash Management Tool 1: Interest-Earning Checking Accounts
o Cash Management Tool 2: Savings Accounts
o Cash Management Tool 3: Money Market Accounts
o Cash Management Tool 4: Low-Risk, Long-Term Savings Instruments
 Credit Use and Credit Cards
o Distinguishing Between Installment and Noninstallment Credit
o Reasons For and Against Using Credit
o Types of Open-Ended Credit Accounts
o The Process for Opening an Open-Ended Charge Account
o Managing a Charge Account
 Planned Borrowing
o Planning Your Credit Usage
o Establishing a Debt Limit
o Setting Debt Limits for Dual-Earner Households
o The Language of Consumer Loans
o Sources of Consumer Loans
Reviewed by: Bob Walker
April 2003
o Calculating Finance Charges and Annual Percentage Rates
o Dealing with Overindebtedness
 Automobiles and Other Major Purchases
o Guidelines for Wise Buying
o Steps Taken Before Interacting With the Seller
o Comparison Shopping
o Negotiate and Decide upon the Best Deal
o Evaluate Your Decision
 The Housing Expenditure
o Renting versus Owning Your Home
o How Much Can You Afford for Housing?
o Financing a Home
o What does it Cost to Buy a Home?
o Special Considerations in Home Buying
o Selling a Home: a Lesson in Role Reversal
 Risk Management and Property/Liability Insurance
o Risk and Risk Management
o What is Insurance?
o Homeowner’s Insurance
o Automobile Insurance
o Other Property and Liability Loss Exposures
o Collecting on Your Property and Liability Losses
 Health Care Planning
o Providers of Health Care Plans
o Coverages Provided by Health Care Plans
o Making Sense of Your Health Benefits
o Disability Income Insurance
 Life Insurance Planning
o Why Buy Life Insurance?
o How to Determine Your Life Insurance Needs
o Types of Life Insurance
o Understanding Your Life Insurance Policy
o Strategies for Buying Life Insurance
 Investment Fundamentals and Portfolio Management
o Preparations for Investing
o Discovering Your Own Personal Investment Philosophy
o Investment Selection
o Major Factors That Affect the Rate of Return on an Investment
o Portfolio Management Strategies for Long-Term Investors
o The Best Time to Sell
Reviewed by: Bob Walker
April 2003
 Investing in Stocks and Bonds
o Stocks and Bonds and How They are Used
o The Language of Stock Investing
o Four Basic Classifications of Common Stock
o The Language of Bond Investing
o Types of Bonds Available to Investors
o What Should You Consider Before Investing in Bonds?
o Advantages and Disadvantages of investing in Bonds
 Investing Through Mutual Funds
o Reasons for Investing Through Mutual Funds
o The Different Objectives of Mutual Funds
o Classification of Mutual Funds according to Their Portfolios
o Unique Benefits of Mutual Funds
o The Costs of Investing Through Mutual Funds
o Strategies for Selecting a Mutual Fund
o When to Sell a Mutual Fund
 Buying and Selling Securities
o Securities Markets
o Operation of a Brokerage Firm
o Interpretation of Stock, Bond, and Mutual Fund Quotations
o Securities Transactions and the Investor
o Information about Securities
o Estimating and Calculating Potential Returns on Investments
o How to Invest: A Twelve-Step Process
 Real Estate and Advanced Portfolio Management
o Advantages and Disadvantages of Real Estate and Techniques of
Advanced Portfolio Management
o What Should You Pay for a Real Estate Investment?
o Direct and Indirect Ownership Investments in Real Estate
o Speculation in the Securities Markets
o Speculation with Tangible Investments
 Retirement Planning
o Radical Changes for Workers and Retirees
o Retirement Expenses and Income Sources
o Tax-Sheltered Retirement Plans
o Employer-Sponsored Qualified Retirement Plans
o Personal Retirement Plans
o Social Security Retirement Benefits
o A Retirement Planning Illustration
 Estate Planning
o Distributions by Probate Court
Reviewed by: Bob Walker
April 2003
o Distributions by Prearranged Actions Outside Probate Court
o Use of Trusts to Transfer Assets and Reduce Taxes
o Protection of an Estate from Transfer Taxes
9.0
Bibliography:
Garman, E. Thomas and Forgue, Raymond E., Personal Finance, Sixth Edition,
Houghton, Mifflin Company, Boston and New York, 2000.
Dominguez, Joe and Robins, Vicki, Your Money or Your Life, Second Edition, Penguin
Books, 1999.
Kiyossaki, Robert T. with Lecturer, Sharon L. C.P.A., Rich Dad Poor Dad, Time
Warner Books Printing, 2000.