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Life Cycle of Financial Planning Take Charge of Your
Life Cycle of Financial Planning Take Charge of Your Finances Question of the Day True or False: “Everyone follows the same financial plan.” Pair/Share Talk with a partner next to you about the previous statement. Listen to their thoughts and be prepared to share what they had to say. Statement: FALSE! People don’t have the same life experiences, major life events, or financial plans. Everyone’s Financial plan will vary. Planning is a tool that will help you achieve financial success based on the development and implementation of your own financial goals. Various Lifestyle Conditions Marital Status Single Married Divorced Widowed Lifestyle Conditions Employment Status Employed Unemployed Facing Unemployment Lifestyle Conditions Age High School Young Adult Adult with or without Children Working Parent or Adult Midlife Pre-Retirement Retired Lifestyle Conditions Number of Dependents Children Spouse Parents Other family members Lifestyle Conditions Economic Outlook Interest Rates Credit Score Debt Level Employment Level Salary Rates Lifestyle Conditions Education Education level of family members Tuition needs for children Lifestyle Conditions Health Status Unpredictable Issues Dental Work Doctor Visits Mishaps Etc. Lifestyle Conditions For example: A 19 year-old single mother’s financial plan is much different than a 19 year-old student without a child. All people have a different plan. Stage 1 – Basic Wealth Protection The beginning of the curve is where a person “quits giving money to others” and is the family formation stage for many people. Begin to earn money, continue education, start a job or career. Focus on gaining wealth and earnings. Stage 2 – Wealth Accumulation The second stage is where a person is “giving the money to self.” Household has reached peak earnings, is accumulating wealth, and approaching retirement. Stage 3 – Wealth Distribution The third stage involves “giving the money to your chosen ones.” Also known as retirement, where consumption of wealth occurs and involves estate planning. Pyramid Discussion How important is building a solid foundation? What does building this foundation allow a person to do? Do early decisions affect future options? Now: Let’s talk about budgets… Activity Time You will be working in small groups to brainstorm various activities and events that require financial planning that occur during the given age group. Each group will have a separate age group to work with. Break into groups! With your group, write down your ideas for the various events and activities that occur for your specific age group. Discussion Let’s see what you came up with! 13-17 18-24 25-34 35-44 45-54 55-64 65+ Discussion What financial plan goals listed on the board could apply to you? What about any that apply to other students in general? What are some of your personal values and goals which will affect your financial plans? Why is it important to start financial plans now? Resources to help you get there: Wages, summer jobs, investments, savings, hobbies, skills, extra-curricular activities, gifts, scholarships. “Everyone has the same financial plan” Why is this statement incorrect?