This document provides an overview of personal financial planning. It discusses factors that influence financial decisions like life situation and the economy. It also outlines the key activities in financial planning such as obtaining income, saving, borrowing, spending, managing risk, investing, and retirement planning. The document emphasizes the importance of setting realistic and specific financial goals and understanding opportunity costs and the time value of money when making financial decisions. It provides guidance on developing a comprehensive financial planning process that involves assessing one's current situation, setting goals, evaluating alternatives, creating an action plan, and reviewing progress. Additionally, the document covers how career choice relates to financial planning and offers tips for career planning and job searching.

1. Focus on Personal Finance Personal Financial Planningin Action Chapter 1

2. Focus on Personal Finance Objectives Identify social and economic influences on personal financial goals and decisions Develop personal financial goals. Assess personal and financial opportunity costs associated with financial decisions Implement a plan for making personal financial and career decisions

3. Focus on Personal Finance Lesson 1: Making Financial Decisions

4. Advantages of Personal Financial Planning Increased effectiveness in obtaining, using and protecting financial resources Increased control of your financial affairs Improved personal relationships A sense of freedom from financial worries Focus on Personal Finance

5. Focus on Personal Finance Factors in Financial Planning Decision Making Life situation Economy Financial Planning Activities

6. Focus on Personal Finance Life Situation Adult lifecycle stage Age Marital status Number and Age of household members Employment Situation Major events Graduation, marriage, children, retirement etc. Values or what is important to you

7. Focus on Personal Finance Economy The economic environment Institutions, principally business, labor and government that work together to satisfy our needs and wants. Federal Reserve Bank (The Fed)- Is our nation‘s central bank and very important in our economy Is concerned with maintaining an adequate money supply by influencing: Borrowing Interest rates Buying and selling government securities

8. Focus on Personal Finance Economy cont’d Global Influences Imports vs Exports Inflation- the rise in the general level of prices Buying power of the dollar decreases Interest rates represent the cost of money

9. Focus on Personal Finance Financial Planning Activities Obtaining-receipt of income and other financial resources Planning-actions to determine future directions Saving- set aside funds for expected and unexpected expenses Borrowing-appropriate use of short-and long-term credit plans

10. Focus on Personal Finance Financial Planning Activities cont’d Spending- analysis of purchasing decisions for wise money use Managing Risk-insurance and other methods to reduce financial uncertainty Investing-accumulation of funds for long-term financial security Retirement and Estate Planning-efforts to provide for post-career years and transfer of assets

11. Focus on Personal Finance Lesson 2: Developing and Achieving Financial Goals

12. Focus on Personal Finance Type of Financial Goals Short-term- achieved in next year or so Intermediate goals- achieved in 2-5 years Long-term goals-plans more than 5 years off

13. Focus on Personal Finance Goal Setting Guidelines Goals should be realistic Goals should be stated in specific terms Goals should have a time frame Goals should indicate the action to be taken Discuss some of your goals

14. Focus on Personal Finance Lesson 3: Opportunity Costs and the Time Value of Money

15. Focus on Personal Finance Personal Opportunity Cost Opportunity Costs- what a person gives up to make a choice Personal Costs time used for one activity cannot be used for another Financial Costs Saving or investing a dollar instead of spending results in a future amount greater than a dollar. Current needs can make spending worthwhile but future interest earned is foregone.

16. Focus on Personal Finance Time Value of Money TVM- The increases in an amount of money as a result of interest earned.

17. Focus on Personal Finance Simple Interest Amount in savings x annual interest rate x time period equals the interest.$100 x 5% x 1 (1 year) 100 x .05 x 1 = $5.00In one year you have $100 in principle plus $5.00 in interest for a total of $105 at the end of the year.

18. Focus on Personal Finance Future Value Future value is the amount to which current savings will increase based on a certain interest rate and a certain time period. Future value is also call compounding - earning interest on previously earned interest. Future value can be computed for a single amount or for a series of deposits.

19. Focus on Personal Finance Present Value The current value for a future amount based on a certain interest rate and a certain time period. Present value calculations are also called discounting. The present value of the amount you want in the future will always be less than the future value. Present value can be computed for a single amount or for a series of deposits.

20. Focus on Personal Finance Lesson 4: A Plan for Personal Financial Planning

22. Develop your financial goals.

23. Identify alternative courses of action.

24. Evaluate your alternatives.

25. Create and implement your financial action plan.

27. Focus on Personal Finance Career Planning Process Personal assessment Employment market analysis Application process Interview process Employment acceptance Career Development and Advancement

28. Focus on Personal Finance Identify Career Trends Print and other media sources such as the Occupational Outlook Handbook Online sources are available of all aspects of career planning Informational interviews- A planning discussions with a person in a field of interest

29. Focus on Personal Finance Obtain Employment Experience Part-time employment Volunteer work Internships Campus projects

30. Focus on Personal Finance Identifying Job Opportunities Job advertisements Career fairs Employment agencies Business contacts Job creation Other job search sources

31. Focus on Personal Finance Resumes Present in a professional manner Limit to one page (use more pages only if you have enough valid information) Use action words to demonstrate accomplishments Foreign language skills, computer experience, research experience, overseas study, team projects, flexible, achievement

32. Focus on Personal Finance Cover Letters Introductory paragraph gets readers attention. The development paragraphs highlights aspects of your background that qualify you for position. The concluding paragraph should request action. Close by summarizing your benefits to the organization.