MANAGIN

G YOUR

PERSONAL FIN

ANCES

FINANCIA

L PLANNING:

YOUR ROADM

AP TO SUCCESS

MRS. GRAY

SPRING 2015 – Q3

DO NOW

What goals have you set for this course or thisschool year?

Are they SMART?

STANDARD:

1.1 Students will be able to explain the importance of a financial plan and identify its main components.

Lesson Goals:• I can understand why

financial planning is important.• I can distinguish between a want and a

need.

What’s so important about Financial Planning?Financial planning is a process of •setting goals (short, medium or long term)•developing a plan•putting the plan into action, and•achieving goals

What’s so important about Financial Planning?

It’s creating a roadmap for handling everything you do with your money—spending, savings, using credit and investing.

What’s so important about Financial Planning?

Without a roadmap, you may not arrive at your destination or even know that you have arrived.

Life is a journey, not a destination. Ralph Waldo Emerson

What’s so important about Financial Planning?On a white board write down:What do you regularly purchase (every week or so)? and What are currently saving to purchase?

What’s so important about Financial Planning?

From the items that you buy and save for, some are needs and some are wants: Needs: the very basic things we must have to survive.

Wants: the things that make life more interesting and fun (but you could live without them if you had to).

What’s so important about Financial Planning?

From your list, which are needs and which are wants?

Needs: the very basic things we must have to survive.

Wants: the things that make life more interesting and fun (but you could live without them if you had to).

DO NOW: Wants vs. Needs

(See U1 Handout - Needs and Wants) things that you want

5 things that you needPeople define needs and wants differently depending on your values (beliefs and practices in your life)

Needs: the very basic things we must have to survive.

Wants: the things that make life more interesting and fun (but you could live without them if you had to).

DO NOW: Wants vs. NeedsSee U1 Handout - Needs and Wants

Self-reflection:Why are the wants and needs lists

different from one student to another? What factors determines your wants

and needs?

Needs: the very basic things we must have to survive.

Wants: the things that make life more interesting and fun (but you could live without them if you had to).

Lesson Goals:Students will be able to describe the 5

steps of a financial plan.

STEP 1: Set SMART Goals

A goal is a destination (something you want or need) which you acquire by takingcertain steps.

STEP 1: Set SMART GoalsEffective goals should be in defined in a SMART way:

•Specific

•Measurable

•Attainable

•Realistic

•Time Bound

Set SMART Goals Example #1Save $50 by the end of next month using babysitting money earned ($15 per week) to buy a new video game. Is this short-term goal SMART:•Specific•Measurable•Attainable•Realistic•Time Bound

Yes or No?

Set SMART Goals Example #2Save $2,000 from a summer job working at a fast food restaurant (saving $100 per week) for the next three years for a down payment on a car. Is this long-term goal SMART:•Specific•Measurable•Attainable•Realistic•Time Bound

Yes or No?

DO NOW: SMART Goals Practice

Are these Goals SMART?see U1 Handout - Smart Goals

What is a SMART Goal?SMART

DO NOW: What is the difference between a want

and a need? Can something be a want for one person and a need for someone else? Explain your thinking.

Goals of the Day• I can describe the 5 steps of a

financial plan.• I can describe the 3R’s of Money

(Financial Responsibility)

DO NOW: Is this Goal SMART?

Save $75 by the end of the month using money earned ($25 per week) to pay for a camping trip that I would like to attend.

Identify the Smart Components

The 5 Steps of Financial Planning

5Monitor

& Modify the Plan

1Set

SMART Goals

2Analyze

Information

4Implement the Plan

3Create A

Plan

STEP 2: Analyze InformationWhere does your money go?

It is important to create a Personal Spending Record to keep track of your Cash Flow (money you receive and spend).

STEP 2: Analyze Information

Where does your money go?

DO NOW (See U1 Handout- PersonalSpending Record) What do you spend your money on? Create a simple Cash Flow Record that shows the money you received and the money you spent during the last week. (Remember, you can not spend more than you receive.)

 

Income +$ Spending -$Sunday  

  

 

Monday   

 

Tuesday   

 

Wednesday   

 

Thursday  

   

Friday  

   

Saturday 

   

Totals 

    

Difference (Income minus Spending)

 

STEP 2: Analyze Information

STEP 3: Create a Plan

Making decisions about how you are going to spend your money based

on your values, culture,habits and opinions of your friends and parents.

STEP 3: Create a Plan

• Identify your goals• Establish your criteria• Examine your options• Weigh the pros and cons• Make your decision• Evaluate result

STEP 3: Create a Plan

• Identify your goals• Establish your criteria• Examine your options• Weigh the pros and cons• Make your decision• Evaluate result

DO NOW: Use the DECISION MAKING

STEPS to decide which movie to see this

weekend with your friends!

STEP 4: Implement the Plan• Write down your goals and post them

where you can see them• Tell others about your goals• Create a budget (highlighting income and

expenses…more on this later)• Spend money according to your

budget• Review your plan regularly

STEP 4: Implement the PlanReflection:• Why do you think it is important to write

down your goals and post them where you can see them?

• Why tell others about your goals?• Have you experienced a time when one of

these strategies helped you accomplish your goal?

STEP 5: Monitor and Modify the Plan • Need to monitor the plan to make

sure you are staying on track• Review your plan at regular

intervals.• Modify the plan if your goals or

finances change or your resources vary

STEP 5: Monitor and Modify the Plan Reflection Question #1:

Why is it important to modify your plan if something happens (and something always happens)?

STEP 5: Monitor and Modify the Plan Reflection Question #2:

What must you do if you find your plan is not working for you? (For example, you are not able to earn as much as you thought you could.)

3 R’S OF MONEY: Reality, Responsibility & Restraint

Personal Financial Responsibility is attained when you recognize:•The reality that you will have set income•It is your responsibility to handle money wisely. •When you show restraint or self-control to save your money for a futuregoal instead of spending it now.

Look at the goals of the Unit, what do you need to review to prepare for our first assessment.

HOMEWORK

TICKET OUT THE DOOR:

Explain (in paragraph format) how creating a financial plan will help you accomplish your goals. Why is it important?

Goal of the Day

• Students will create personal financial roadmap and reflect on how creating a financial plan will help you accomplish your life’s goals.

DO NOW: PERSONAL FINANCIAL ROADMAPClose your eyes and think about the wants and needs that you will be spending your money on in the future (cars, education, children, houses, vacations, etc.) Write these down.

DO NOW: PERSONAL FINANCIAL ROADMAP

Using your list of wants and needs create a roadmap (poster) that shows your life’s journey with these expenditures in mind.

DO NOW: PERSONAL FINANCIAL REFLECTION

Post your completed roadmap (poster) around the room and complete the Step 2 Reflection (o back).