Money Matters: Values, Vision, Mission, and You

1. Money Matters: Values, Vision, Mission, and You CHAPTER PLAY LIST SONGS: “If I Had a Million Dollars” by Barenaked Ladies “Cat’s in the Cradle” by Harry Chapin “For the Love of Money” by the O’Jays

2. Learning Objectives • LO 1-1 Evaluate your spending and savings habits and define what financial success means to you. • LO 1-2 Develop a plan for engaging in fiscally responsible, goal-based spending and saving. • LO 1-3 Align your financial plan with your personal goals. • LO 1-4 Explore the different career choices that fit your personal mission statement and established goals.

3. Step 1: Perception of Financials • Your Personal Relationship with Money • How do you view money? • What do you do if you don’t have enough money? • What would you do with an extra $600?

4. Add the number of A, B, C, D, and E statements you selected. If you selected mostly: • A’s – You value you money for the security it provides • B’s – You want a lot of material items, and you want them now • C’s - Money helps you feel important. • D’s – Money is a resource to get the things you need or want. • E’s – You are not concerned about money, there is no reason to worry about it

5. Step 2: Identifying Your Values • Values = Driven Financial Planning • Values drive Vision; Vision drives Mission; Mission drives Goals • Worksheet 1.2 – Clarifying Values

6. Step 2: Identifying Your Values • Worksheet 1.2 Clarifying Values Complete & Turn in tomorrow

7. Values-Driven Financial Planning • Financial decisions as a reflection of values • Trade-offs – Opportunity costs • Voluntary simplicity • http://www.choosingvoluntarysimplicity.com/ • Frugal • http://urbanhomestead.org/ • Enough • Allocation of your income

8. Enough

9. Allocations • What percentage of your income should you: • Save? • Invest? • Give? • Savings – emergency fund –pay yourself first! • Establish the habit of saving • Automatic transfer and withdrawals • Investing – long-term money • Automatic transfer and withdrawals • Giving — be an engaged community member • May be either money or time

10. Personal Financial Success • What is your definition of personal financial success? Video Links: • Warren Buffett, “Financial Rules to Live By” • Dave Ramsey, “How to Be Financially Successful” • Suze Orman, “Can You Afford Your Life?”

11. Step 3: Accessing Methods • Does your definition of financial success include financial independence? • Financial Independence: Sufficient means to support oneself; when passive income exceeds expenses

12. Financial Independence Passive income exceeds expenses

13. Reaching Financial Independence Sooner… (1) lower the expense line by reducing expenses and living more frugally AND/OR (2) increase savings and invest more money sooner

14. Financial Literacy • Ability to understand finances • Know the risks and potential rewards of making financial investments • Understand which financial products and services best meet your needs to achieve your goals

15. Who to Trust • You have to know enough to protect your assets • Bernie Madoff Ponzi Scheme • Pled guilty to 11 federal crimes • Sentenced to 150 years in prison • Defrauded many institutional investors • No one is going to care more about your money than you. Make wise choices and decisions with your money. Be financially literate.

16. Options to Financial Independence (FI) • Downshifting – deliberately reducing your expenses (not keeping up with the Joneses) • Augmenting your income • Investing (to achieve greater passive income) • Dollar cost averaging – make saving automatic • Choose investments that reflect your goals and values

17. Financial Plan • Your financial plan should be values- and goal-based and include: • A future income plan (career goals) • A budget plan (spending goals) • A savings plan (savings goals) • An investment plan (gaining assets goals) • An insurance plan (protection goals) • An estate plan (giving goals)

18. Personal Finance Life Stages

19. Step 4: Create a Vision for Your Future

20. Vision, Mission, and Goals • Values drive Vision; Vision drives Mission; Mission drives Goals • Use a mind map to create a vision for your future • How do you picture your life in 10, 20, 30, 50 years? • What do you want to be known for as you reflect back on your life in your final days? • What would your “perfect” life look like in the future?

21. Vision Vision

22. Step 5: Money and Mission

23. Mission Statement should reflect: • Your Strengths (things you do best) • Your Passions (the things you enjoy doing) • Your Gifts (the things you do naturally without effort) • Your Stakeholders (those who have helped you and those who you have helped) Then minimize it, simplify it and memorize it! • For Example: Lead a debt free life, following the principles of the 80 – 10 – 10 rule.

24. Personal Mission Statement Mission Statement Builders 1. Franklincovey.com: http://www.franklincovey.com/msb/ 2. Nightingale Conant: http://www.nightingale.com/mission_statement.aspx

25. Step 6: Goal Setting

26. Goal Setting • Long-Term Goal: Objective that you aim to reach sometime after 5 years • Intermediate Goal: Objective that should be attained in 1-5 years • Short-Term Goal: Objective that should be reached in less than 1 year

27. Example: Long-Term Goals

28. Example: Intermediate-Term Goals

29. Example: Short-Term Goals

30. S – Specific M – Measurable A – Attainable R – Realistic, Relevant T – Time-bound, having a specific end date and timeline “If you can dream it, you can do it” -Walt Disney SMART Goals

31. Career Choices, Money, and Happiness What Makes You Happy? • Your genes (50%) • Circumstances (10%) • Intentional activity (40%) Video link: Denmark– The Happiest Place on Earth

32. Money only makes you happy if: • You have more than everyone else in your tribe • You use it to do good and are responsible with your money • You have enough to survive

33. Career and Education Choices • If you can pursue your passions all day long and get paid for it, you don’t have to “work” a day in your life. • Explore your career opportunities • Occupational Outlook Handbook • Internships • Job Shadowing • Career Center Resources

34. Chapter 1 Summary • Assess your personal relationship with money and establish your values, vision, mission, and SMART goals. • LO 1-1 Evaluate your spending and saving habits and define what financial success means to you. • LO 1-2 Develop a plan for engaging in fiscally responsible values and goal-based spending and savings. • LO 1-3 Align your financial plan with your personal goals. • LO 1-4 Explore the different career choices that fit your personal mission statement and your established goals. • What makes you happy?