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Today, there are three kinds of people:  the have's, the have-not's, and the have-not-paid-for-what-they-have.  ~Earl W

Today, there are three kinds of people:  the have's, the have-not's, and the have-not-paid-for-what-they-have.  ~Earl Wilson. Unit 1 Financial Planning Process. Teens Have A Lot of Money and They Spend It!. Questions You Should Be Able To Answer. What are five keys to keeping a budget?

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Today, there are three kinds of people:  the have's, the have-not's, and the have-not-paid-for-what-they-have.  ~Earl W

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  1. Today, there are three kinds of people:  the have's, the have-not's, and the have-not-paid-for-what-they-have.  ~Earl Wilson

  2. Unit 1Financial Planning Process

  3. Teens Have A Lot of MoneyandThey Spend It!

  4. Questions You Should Be Able To Answer • What are five keys to keeping a budget? • What are the two main categories of a budget? • What is the most important key to keeping a budget?

  5. FINANCIAL PLANNING DEFINED • “The process of defining goals, developing a plan to achieve them, and putting the plan into action”

  6. FINANCIAL PLANNING DEFINED • Retirement – “Lifestyles” • Family Related Expenses • Housing, College, Weddings • Asset Protection • Personal Liability, Heath Care • Elder Care • Family • Personal

  7. Financial Planning Process

  8. STEP 1 Set Goals

  9. Key Words • Goals • A specific statement of what you want to achieve, giving direction to your plan of action • Goal Setting • The process of deciding which needs or wants you want to pursue, based on your values and outside influences

  10. NEEDS vs WANTS • NEEDS • Essentials…the basics of life • Food • Clothing • Shelter

  11. NEEDS vs WANTS • WANTS • Simply increase your quality of living

  12. Needs verses Wants • NEEDS • Nutritious food • A place to live • Clothing to wear • Transportation to and from school • WANTS • Designer jeans • Junk food • Video games • Cell Phone

  13. Key Words • Needs • Something basic for your survival • Value • A belief you consider important or desirable • Wants • Something you desire to make your life more comfortable

  14. Family Friends Education Church Work The beliefs and practices in your life that are very important to you. Values

  15. SMART Goals Specific……..What exactly do you want to do? Measurable…How much money do you need? Attainable…..How much do you need to save? Realistic…….How do you plan to do this? Time-Limited….How long will it take you?

  16. SMART Goals Timelines • Short Term • Up to three months • Intermediate Term • Three months to one year • Long Term • Longer than one year

  17. Step 2 Analyze Information

  18. Cash Flow • A measure of the money you receive and the money you spend.

  19. Sample Monthly Budget Income

  20. Fixed Expenses • Housing • Tuition • Utilities • Car Insurance • Cell Phone | 20

  21. Variable Expenses • Books for college • Food • Entertainment • Gifts and celebrations • Gas or transportation | 21

  22. You Must Be Kidding! 1 Starbucks® drink @ $3.50 $3.50 x 7 days = $24.50 $3.50 x 365 days = $1,227.50 1 burger, fries and drink @ $5.25 $5.25 x 7 days = 36.75 $5.25 x 365 days = $1916.25 1 carton of cigarettes @ $44.00 $44.00 x 12 months = $528.00 | 22

  23. Step 3 Create A Plan

  24. Sample Monthly Budget Income

  25. Sample Monthly Budget Income

  26. Step 4 Implement the Plan

  27. Step 5 Monitor and Modify the Plan

  28. The Secret Every Millionaire Knows Live within your income or budget. | 28

  29. Answers • Five keys to keeping a budget 1. Set SMART Goals 2. Analyze Information 3. Create A Plan 4. Implement the Plan 5. Monitor & Modify the Plan • Two main categories of a budget • Income and Expenses • Most important key to keeping a budget • Follow through

  30. Now What? • Identify where your money comes from. • Track where your money goes – keep a spending diary for a month! • Create a budget and monitor your spending. • Reconsider your wants and needs. • Live within your income.

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