Bellwork 1-1

1. Bellwork 1-1 • Think of a goal you have in life: • What would be a major life event that could effect you achieving that goal? • How could your education level effect you achieving that goal? • How could your health condition effect you achieving that goal?

2. Financial Life Cycle Unit 4 Objective 2.02

3. Life Factors Blog • Go to: http://www.docstoc.com/docs/22428791/Factors-affect-your-personal-financial-planning, click full screen and answer the following: • What does the article say about “Life situation and personal value”? • What does the article say about “Economic Factors”? • What does the article say about “Global Influence”? • What does the article say about “Economic Condition”?

4. Financial Planning Many people follow a similar financial pattern during their life BUT Everyone has an individualized financial plan

5. Financial Planning Financial goals - specific objectives to be accomplished through financial planning Financial Goals should be SMART goals Financial planning - a tool used to achieve financial success based upon the development and implementation of financial goals

6. What influences a person’s financial plan? 1) Values, Goals, Personal Choices: • Values - What’s important to you? • Goals - What do you want to achieve? • Personal Choices - Decisions that effect your everyday life

7. Graduating High School Going to College Graduating College Military First Job First time living on your own Marriage Children Purchasing a House Changing Careers Relocation Retirement Deaths in the Family What influences a person’s financial plan? 2) Major Life Events:

8. What influences a person’s financial plan? 3) Lifestyle Conditions: • Age-a set of consecutive ages that tend to have similar incomes, needs, and expenses • Dependents- number of persons relying on a person for financial support (children, spouse, parents, other relatives) • Economic outlook- inflation/recession/depression, unemployment rate, interest rates • Education level- less than high school, high school diploma, associate’s degree, bachelor’s degree, master’s degree, doctorate • Employment status- employed, self-employed, unemployed; part-time, full-time • Health condition- chronic or debilitating illnesses, injuries, disabilities • Marital status- single, married, divorced, widowed

9. Financial Influences Assignment • List 5 values you have • List 2 past goals you have had and for each answer: • How did your values shape that goal? • What personal choices did you have to make for that goal? • What major life events affected that goal? Why? • State the Lifestyle Conditions of that goal: (age, dependents, economy, education level, employment statues, health condition, martial status) • List 2 future goals you have and for each answer the following: • How did your values shape that goal? • What personal choices will you have to make for that goal? • What major life events could affect that goal? Why? • State the Lifestyle Conditions of that goal: (age, dependents, economy, education level, employment statues, health condition, martial status) • Complete in PowerPoint and submit to Edmodo by the end of class.

10. Bellwork 1-2 • Single mom Marjorie works full-time to take care of her two children and her aging grandmother. Which lifestyle conditions does this illustrate? • A. Age, dependents, and health condition • B. Dependents, marital status, and employment status • C. Marital status, education level, and economic outlook • D. Marital status, economic outlook, and age • After her divorce, Marissa earned her master's degree and was hired as an executive in a downtown business firm. Which lifestyle conditions does this illustrate? • A. Dependents, education level, and health condition • B. Economic outlook, marital status, and employment status • C. Marital status, education level, and employment status • D. Marital status, economic outlook, and age • Doris and Bill Alston met with their lawyer to review their last will to be sure their children would be well-provided-for. Which stage of the financial life cycle does this illustrate? • A. Before financial life cycle begins • B. Basic wealth protection • C. Wealth accumulation • D. Wealth distribution

11. What influences a person’s financial plan? 4) Life Cycle Needs: • Each stage of your life has its unique set of challenges and financial needs • Incomes, needs, and expenses for individuals and families vary at each stage of the life cycle: • Incomes tend to vary with age and level of education and work experience. • Needs arise because of activities and events that occur at different stages of life. • Expenses tend to vary throughout life as life cycle needs produce financialneeds.

12. Typical Financial Life Cycle Single * Marriage * Start and Raise Family Approaching Retirement Years Retirement Years Stage 3: Wealth Distribution $ Stage 2: Wealth Accumulation Stage 1: Basic Wealth Protection Years of Age 0 20 30 40 50 60 70 80

13. Financial Life Cycle Stages Stage 1: Basic Wealth Protection Focus on building financial security Stage 3 Stage 2: Wealth Accumulation Head of household has reached peak earning years, is accumulating wealth, and approaching retirement Stage 2 Stage 1 Which stage of the financial life cycle are you in? Stage 3: Wealth Distribution The consumption of wealth, usually during retirement

14. What types of financial planning would occur during each stage of the financial life cycle? • Stage 1: Basic Wealth Protection (protecting your future) • Develop emergency savings • Develop positive credit • Begin investing in retirement • Purchase insurance Stage 3 Stage 2 • Stage 2: Wealth Accumulation (giving it to yourself) • Investing to build wealth • Purchasing a home Stage 1 • Stage 3: Wealth Distribution (giving it to your chosen ones) • Estate planning

15. Individual vs. Family Life Cycle

16. Individual vs. Family Life Cycle

17. Financial Life Cycles Part 1 Assignment • Go to: http://www.planandact.com/Public/Info_UnderstandingTheTenSteps.aspx and answer: • What are the 3 stages of the Formative Stage? • Describe in detail all 3 stages • What are the 3 stages of the Accumulation Stage? • Describe in detail all 3 stages • What are the 2 stages of the Conservation Stage? • Describe in detail both stages • What are the 2 stages of the Distribution Stage? • Describe in detail both stages • Think of 4 people you know who fit each of the above stages: • Who are they and why do they fit the Formative Stage? • Who are they and why do they fit the Accumulation Stage? • Who are they and why do they fit the Conservation Stage? • Who are they and why do they fit the Distribution Stage? • Complete in PowerPoint and submit to Edmodo by the end of class.

18. Bellwork 1-3 • Mark Johnson began work as a bank manager with a good salary after graduation last year. His wife is a full-time university student working on a master's degree. Which stage of the financial life cycle does this illustrate? • A. Before financial life cycle begins • B. Basic wealth protection • C. Wealth accumulation • D. Wealth distribution • Pat has decided to attend the local community college before transferring to the nearest state university to earn a degree in computer technology. Which stage of the financial life cycle does this illustrate? • A. Before financial life cycle begins • B. Basic wealth protection • C. Wealth accumulation • D. Wealth distribution • Which is an example of a midlife adult in a launching family? • A. Shirley, age 30, single mom with two sons in middle school, adopting an infant girl • B. Steve, age 45, married, two children in college • C. Tammy, age 23, plans to get married in the spring • D. Terry, age 58, lives with her 60-year-old husband, both plan to retire in five years • Which is an example of a typical income for an adult in a mid-years family? • A. Commission as a salesman for a car dealership • B. Large salary for a management position • C. Minimum wage job • D. Volunteer for a community service organization

19. Financial Life Cycle Events Activity Determine what types of financial planning may occur for each age group. People in certain age groups tend to have similar financial life cycle needs

20. Traditional Age Group Financial Planning Needs • Developing a plan for eventual independence • Preparing for career • Evaluating future financial needs and resources • Exploring financial systems – banks, etc. • Developing a personal system of record keeping

21. Traditional Age Group Financial Planning Needs • Establishing a household • Training for a career • Earning financial independence • Determining insurance needs • Establishing credit • Establishing savings • Creating a spending plan • Begin investing in retirement • Developing a personal financial identity

22. Traditional Age Group Financial Planning Needs • Child-bearing • Child-raising • Expanding career goals • Investing in retirement • Managing increased need for credit • Discussing and managing additional insurance needs • Creating a will • Starting an education fund for children

23. Traditional Age Group Financial Planning Needs • Upgrading career training • Developing protection needs for head-of-household • Investing in retirement • Establishing retirement goals • Building on children’s education fund • Need for greater income due to expanding needs

24. Traditional Age Group Financial Planning Needs • Assisting with higher education for children • Investing in retirement • Updating retirement goals and plans • Developing estate plans

25. Traditional Age Group Financial Planning Needs • Consolidating assets • Re-evaluating property transfer • Investing in retirement • Evaluating expenses for retirement and current housing • Planning future security • Investigating retirement part-time income or volunteer work • Meeting responsibilities of ageing parents • Planning for long-term care insurance and medical care in retirement

26. Traditional Age Group Financial Planning Needs • Re-evaluating and adjusting living conditions and spending as related to health and income • Adjusting insurance programs for increasing risks • Finalizing will or letter of last instructions • Acquiring assistance in management of personal and financial affairs • Finalizing estate plans

27. Financial Life Cycles Part 2 Assignment • Go to: http://www.cambridgeconnection.com/financial-life-cycle/and answer: • List and describe the 10 life cycle stages as stated by this article • Think of 5 people you know, each in different stages of the life cycle: • What are 3 characteristics of their life? • What are 3 characteristics of that age bracket according to the notes? • Do the characteristics of the person you know match up with the notes? • Why or Why not? • Complete in PowerPoint and submit to Edmodo by the end of class.

28. Bellwork 1-4 • Which is a typical activity of older adults in an aging family? • A. Because Alice and Ashley began to have more health problems after retirement, they increased their insurance coverage. • B. Beth and Bob are enjoying setting up their first home. • C. Carol and Chuck are putting money into a college fund for their children. • D. While their children are in college, Deb and Dean are revising their retirement plans. • Which is a typical activity of working parents in a developing family? • A. Because Alice and Ashley began to have more health problems after retirement, they increased their insurance coverage. • B. Beth and Bob are enjoying setting up their first home. • C. Carol and Chuck are putting money into a college fund for their children. • D. While their children are in college, Deb and Dean are revising their retirement plans. • Which is a typical activity of midlife adults in a launching family? • A. Because Alice and Ashley began to have more health problems after retirement, they increased their insurance coverage. • B. Beth and Bob are enjoying setting up their first home. • C. Carol and Chuck are putting money into a college fund for their new baby. • D. While their children are in college, Deb and Dean are revising their retirement plans. • Which is a typical activity of an adult in an parenting family? • A. Roxie set up a chores chart with daily tasks for each child in the family. • B. Stan set up a home care schedule for his aging parents. • C. Theo set up a workbench in one end of the couple's small garage. • D. Vera set up an estate plan leaving assets to each of her children and grandchildren.

29. Life Events Blog • Go to: https://www.lgfcu.org/plan/prepare/life-changes.php and answer: • List and describe the 4 life changes that affect finances

30. Factors that vary the Financial Life Cycle • Individuals choose not to marry • Individuals whose spouses die or leave • Couples choose not to, or find they are unable to, have children • Families skip, overlap, or repeat stages, which creates new sequences • Families have additional children several years after first group of children • Families decide to adopt after their children are in launching stage • Families are involved in second marriages; two families blend and stages are repeated • Families create extended families by bringing aging relatives into their homes

31. Life Cycles Review Assignment • Go to the website under Unit 4, 2.01 and open: • Life Cycles Review Worksheets • Complete and submit to Edmodo by the end of class.