Plan For Life1.1 THE IMPORTANCE OF PLANNING

Objectives

Explain the Process of PlanningDiscuss Planning for your LifeDescribe a balance between planning and impulsiveness

What is Planning?

At every age in life, you need to be looking ahead. Life is a journey and if you think you can make the trip without long-range planning, you’re in for a bumpy ride.

It’s not enough to have some vague ideas about where you want to go and how you want to live. You need an active plan for getting there.

What is a Plan?

A plan is a method or process worked out in advance that leads to the achievement of some goal.

A plan is systematic which means it relies on using a step-by-step procedure.

A plan also needs to be flexible so that it may be adapted to gradual changes.

Rule #1: If you want to enjoy a successful and rewarding life, you have to plan for it.

The Planning Process (6 steps)

Step 1: Set a Goal – Identify something you wish to achieve or obtain (your goal). The goal which is usually longer term in nature will require planning, patience and discipline.

Step 2: Acquire Knowledge – Gain an understanding of your goal and what is required. (Research, conversation and thought).

Step 3: Compare Alternatives – Weigh your options. Analyze the pluses and minuses of each (costs, demands, likelihood of success).

The Planning Process (6 steps - continued)

Step 4: Choose a Strategy – Select one option as the best plan of action based on sound information, experiences, interests and abilities.

Step 5: Make a Commitment – Resolve to proceed step by step toward achieving your goal. Keep your eyes on the prize.

Step 6: Keep Flexible – Evaluate your progress and when necessary, revise your plan to deal with changing circumstances and new opportunities.

Planning for your Life

Using the planning process to make a buying decision is a simple exercise. Making a decision about major parts of your life is far more complex. No part of life is exempt from the need for planning.

Planning For your LifeInterrelated phases of our life that require planning include:

Career – Choose a field of work and develop knowledge and skills in that field.

Self – Deciding who you are and what kind of person you want to be (strengths/weaknesses/values).

Lifestyle – Expressing yourself in that nature and quality of your everyday life. (recreation/hobbies/interests).

Relationships – Developing friendships. Learning to get along with people in a variety of contexts. Building family and community ties.

Finances – Building financial resources and economic security needed to pursue other dimensions of life.

Dreams and Plans

Young people are natural dreamers. Dreams are a source of pleasure and they are part of making a future.

Planning is NOT the same as dreaming, but it uses dreams as raw materials and translates them into SPECIFIC goals.

Planning brings dreams down to earth and turns them into something real and attainable.

Dreams and Plans Dream: Become a trial lawyer. Plan: Analyze necessary skills and take part in activities that develop those skills.

- Debate club, Amateur theatre group, Student government, Essay contest Seek more information on the profession. - Talk to working lawyers, Read about law, Discuss requirements with guidance counselor.

Plan For Life1.2 DEVELOP A CAREER PLAN

ObjectivesDescribe how to choose a career fieldExplain how to obtain the education/skills needed for your chosen field

Choose a Career Field Financial Planning begins with a career strategy – a plan for weighing career options, making choices and preparing for your own field of work.

The goal is to clear a path to work that offers good opportunities, pays well and is suited to your interests, aptitudes, skills and values.

Interests – Activities you find rewarding over an extended period of time (Reading, Surfing).

Aptitudes – A natural talent for learning some skills over others (numerical aptitude).

Choose a Career Field (continued)

Skills – An aptitude that has been developed and improved through training and practice.

Values – The principles that are most important to you. (wealth, faith, family time).

Career planning is demanding. It requires an honest self-appraisal and an awareness of the occupations that match your talents, interests and values.

What do Employers Look For?

1. Work Ethic

2.Basic Skills

3. Computer Literacy

4. Dependability

5. Teamwork

6. Communication

7. Responsibility

8. Initiative

9. Openness

Occupational Outlook Handbook (OOH)

Job Facts Fact 1: The salary gap between low-skill and high-skill jobs is growing wider. As a rule, low-skill jobs pay poorly and offer very limited opportunities for advancement. A good job today almost always requires additional training and/or education beyond high school. Fact 2: Education pays. The more education you have, the more you can expect to earn on every paycheck.

Job Facts (continued) Fact 3: Many of the fastest growing jobs are in technical fields that do not require a bachelor’s degree, but involve a year or two of training beyond high school.

Fact 4: Jobs are less stable and secure than they used to be. Old jobs are being destroyed and new jobs are being created at a mind-boggling rate. Companies are attempting to keep their workforces lean and efficient. Lifetime jobs are rare.

Fact 5: The fastest growing group of workers in the U.S. is people who are working out of their homes.

Plan For Life1.3 MAKE A BUDGET

Objectives

Discuss how to avoid pressure from advertising messages.Prepare and use a budget.

The Earn and Spend Treadmill

Many people are on a treadmill. They work and earn and spend their whole lives but they never seem to get ahead. Some simply don’t earn enough to money aside, but most simply spend their money as fast as it comes in. These people are failing not as workers or earners, but as consumers and money managers.

Advertising Messages

It has been said the Americans are the most propagandized people in the world. Every day we are bombarded with messages telling us to spend money…even money we don’t have. Advertising is vital to the nation’s economic welfare but your economic health often depends on your ability to resist ads and only buy those things that fit into your overall financial plan.

Budgeting A Budget is a plan for dividing your income into spending and saving options.

◦Step 1: Identify Goals (short and long-term)◦Step 2: Track income and expenses◦Step 3: Create a budget worksheet

Identify fixed and flexible expenses.

Budgeting

Fixed – Amounts you are committed to spend and are the same from period to period (usually monthly). ◦ Advantages: You know how much and when you have to pay. ◦ Disadvantages: More difficult and longer to reduce/eliminate these

expenses. Flexible – Amounts that you can choose to spend or not and vary from period to period. Some are necessary (groceries) and others are discretionary (concert tickets). ◦ Advantages : These expenses can be reduced/eliminated easier and more

quickly.◦ Disadvantages : More difficult to predict.

Budgeting Budget Savings and Investing Be sure to build savings and investing into your budget. Treat it as a regular expense and NOT something that you can do with your money if there is any left over after paying your bills.

The purpose of becoming more adept at handling money is to help you achieve your long-term goals.

Good recordkeeping will help you maintain and manage your budget.

Plan For Life1.4 MANAGE YOUR MONEY

Objectives

Describe uses of credit/credit cards.Explain self-provider skills

Wise use of Credit What is credit? Credit is the ability to borrow money in return for a promise of future repayment. Future repayment usually includes interest.

For example, suppose you use credit to buy a jacket for $100. If the interest rate is 15% per year, you must pay $115 at the end of the year. So you are really giving up $115 worth of future spending for the ability to spend $100 now.

Wise use of Credit

The rule is simple. Reserve credit for those special purchases and expenses where it makes economic sense.

Common forms of credit:Credit CardsMortgage LoansCar LoansStudent LoansHome Equity LoansPersonal Loans

Wise use of Credit Many Americans find out every year that credit card debt and debt in general has a way of escalating and getting out of control.

For the most part, you should limit your use of credit to the following three circumstances:

1. Major Purchases (House, Car, College)

2. Unanticipated Emergency/Life Enhancing Opportunity

3. Purchases where retailer is offering a rate lower than what you can earn on your savings/investments.

Use of Credit Cards Credit cards can be very useful:Convenience of not carrying cashRoadside emergenciesPurchase ProtectionRewards

In these cases you are simply using your credit card as collateral on your promise to pay cash. No interest charges if paid in full within 30 days.

Doing Without

One of the keys to achieving your financial goals is an ability to make sacrifices and to give up, at least for the time being, some of the pleasures and luxuries that others take for granted.◦ Carry lunch instead of eating in restaurants.◦ Buy second hand instead of new.◦ In some case not buying at all.◦ Public Libraries.◦ Free Concerts.

Intelligent Buying

Knowing how to get your money’s worth on the things you buy is an important money management skill.

Consumer skills include:◦ Planning purchases and avoiding impulse buying.◦ Consulting consumer reports and other product information sources.◦ Comparison shopping/price checking.◦ Creative purchasing (generic, bulk, surplus, second-hand, flawed,

wholesale)

Self-Providing

You can save a lot of money over time by self-providing. Self-providing is providing in a direct, hands-on way for your needs and the needs of your family instead of paying others for many services.

◦ Home repair and remodeling◦ Car maintenance◦ Cleaning◦ Yard work◦ Cooking◦ Taxes and financial planning◦ Creating your own entertainment