Cycle of Financial Planning Note Taking Guide · 2. What stage of the financial life cycle is Sally currently in (stage 1: basic wealth protection, stage 2: wealth accumulation, or
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Part 1: Life with Sally as a High School Student Directions: Read the following scenario and answer the questions that follow to help Sally develop a personal financial plan. Sally Smith is a 16 year‐old high school junior. She values her family and dreams of having a family of her own. She is very focused on having a successful career in the future. Sally has a part‐time job as a lifeguard at the local pool. She makes $250 per month at this job, and her only expense is paying for personal entertainment, such as going to movies with friends. She has not made any plans for after she graduates high school, but she has been saving money from her job to use for her undecided plans after graduation. Sally’s mom has helped her manage her money, and she has been able to save $1000 to use for plans after high school. Sally enjoys staying busy, so she is a member of her school’s swimming team, orchestra, and choir. Sally enjoys making music and has considered being a music teacher. However, Sally also enjoys taking woodworking classes and has considered a career in woodworking or carpentry.
1. What are three of Sally’s values that will affect her personal financial plan? (3 points)
2. What stage of the financial life cycle is Sally currently in (stage 1: basic wealth protection, stage 2: wealth accumulation, or stage 3: wealth distribution)? How will this affect Sally’s financial plan? (2 points)
3. Identify three of Sally’s current financial life cycle needs. (3 points)
4. How do Sally’s current financial life cycle needs affect her personal financial plan? (1 point)
5. Use the information above to help Sally begin developing a financial plan by writing two SMART financial goals for her. (10 points‐ 5 points for each goal)
a. Goal 1
b. Goal 2
6. List a resource that is available to Sally to help her achieve each of her financial goals. (2 points) a. Resource for Goal 1
b. Resource for Goal 2
7. Why is it important for Sally to start her financial planning today? (1 point)
8. Identify three personal values, goals, and/or personal choices which can affect a high school student’s financial plan. (3 points)
Part 2: Life with Sally as a Young Adult Directions: Sally is now 23 years old. After high school, she chose to attend college to become a music teacher. Sally graduated from college last month and has now accepted a full‐time job as the Choir director at a local high school. The personal choices she made during college are now affecting her financial plan. Below are two scenarios that reflect the choices Sally could have made during her years in college. Read each scenario and answer the questions that follow to examine how financial planning is influenced by personal choices. Scenario 1: During college, Sally decided to put all of her focus into school. She did not have a part‐time job, so she used her student loans and credit cards to pay for her living expenses. By the time Sally graduated college she had a very large amount of credit card debt and student loans that she now has to pay back. By only making the minimum payments, she calculated that it will take her ten years to pay back her student loans and credit card debt. With the salary from her new job as a teacher, she has no money left to use for entertainment, savings, or retirement investing after her living expenses, student loans, and credit cards have been paid for each month. Sally decided to take a second job working a few evenings per week, so she can at least have some extra money every month to use for entertainment. She has calculated that she will earn an extra $200 per month that can be used for entertainment, savings, or additional debt repayment.
9. Have Sally’s values and goals changed since she was 16 years old? Explain. (2 points)
10. Is Sally in a different financial life cycle stage at this point in her life than she was at 16? If so, how will this affect Sally’s current financial plan? (2 points)
11. Have Sally’s life cycle needs changed since she was 16? (1 point)
12. Use the information above to create new SMART financial goals for Sally at this point in her life. (10 points‐ 5 points for each goal)
13. How has Sally’s financial plan changed since she was 16? (1 point)
14. How have Sally’s personal choices affected her financial plan? (1 point) Scenario 2: Sally used the lifeguarding skills she obtained during high school to get a part‐time job at the recreational center at her college. She started working as a lifeguard and was soon promoted to assistant manager because of her work ethic and excellent grades in her college courses. As assistant manager of the recreational center, Sally received a scholarship every semester to help pay for her school, and she was able to graduate with no student loan debt. With her new job as a teacher, she is able to pay all of her living expenses, as well as put money into savings and her retirement plan every month. She has given herself a budget of $100 per month for entertainment and other personal expenses.
15. Have Sally’s values and goals changed since she was 16 years old? Explain. (2 points)
16. Is Sally in a different financial life cycle stage at this point in her life than she was at 16? If so, how will this affect Sally’s current financial plan? (2 points)
17. Have Sally’s life cycle needs changed since she was 16? (1 point)
Life Cycle PhotoView Directions: Interview an adult family member or friend to collect information about their personal financial life
cycle. In addition to collecting information, collect pictures of the interviewee throughout various points in their
life cycle. The pictures collected should depict events, values, goals, life cycle needs, and lifestyle conditions that
had an impact on the interviewee’s financial plan throughout their life. If pictures are not available, then clip art
and/or symbols that represent the adult’s life cycle story can be used instead. If the poster option is used, pictures
could also be drawn by hand. After the interview is completed, use the information and pictures collected to
create a poster or a PowerPoint presentation summarizing the interviewees financial life cycle. The Life Cycle
PhotoView Rubric 1.11.2.B1 is used to grade the poster and PowerPoint presentation. The poster or PowerPoint
presentation should include:
1. A short biography of the interviewee. This could be integrated throughout the poster or PowerPoint presentation. Make sure to include the interviewee’s age and relationship to the interviewer.
2. A minimum of five graphics (pictures, clipart, symbols, drawings). 3. A caption for every graphic describing its significance to the interviewee’s financial life cycle.
Possible Interview Questions:
1. How have your financial needs changed throughout your life? 2. What events in your life do you believe have had the greatest impact on your financial plan? 3. How did these events specifically affect your financial plan? 4. How have your values and goals affected your financial plan? 5. What are your current financial needs?
Participant used time well throughout the project. Participant focused on getting the project done and never distracted others during class.
Participant did not use time well throughout the project and was not focused on getting the project done. Participant never distracted others during class.
Participant did not use time well throughout the project and was not focused on getting the project done. Participant distracted others during class.
3
Content The project completes the objective of using graphics to tell the interviewee’s financial life cycle story. The project includes a short biography of the interviewee.
The project does not complete the objective of using graphics to tell the interviewee’s financial life cycle story. The project includes a short biography of the interviewee.
The project does not complete the objective of using graphics to tell the interviewee’s financial life cycle story. The project did not include a short biography of the interviewee.
3
Graphics At least five graphics are used in the project.
Only four graphics are used in the project.
Three or less graphics are used in the project.
3
Captions Each graphic contains a caption explaining its significance to the interviewee’s financial life cycle.
Some graphics contain a caption explaining its significance to the interviewee’s financial life cycle.
Few graphics contain a caption explaining its significance to the interviewee’s financial life cycle.
3
Quality of Work
The final product is high‐quality and reflects the participant’s best work and effort.
Participant made an effort to make a quality product.
Participant made little effort to create a quality final product.
Directions: Answer the following questions regarding your present and future personal financial plan.
Personal Financial Plan: Present
1. List three personal values which affect your current financial planning. (3 points)
2. What stage of the financial life cycle are you currently in (stage 1: basic wealth protection, stage 2: wealth accumulation, or stage 3: wealth distribution)? How will this affect your personal financial plan? (2 points)
3. What are three financial needs that you have at this point in your life cycle? (3 points)
4. How do your current financial needs affect your personal financial plan? (1 point)
5. Determine what goals you would like to achieve throughout your entire life. Write three of these goals as SMART goals below. To create a comprehensive future financial plan, consider every stage of the financial life cycle when writing your goals. (5 points per goal)
a. Goal 1
b. Goal 2
c. Goal 3
6. Consider the goals written in question 5. What financial tasks would you need to complete throughout your life to help you reach these goals? On the timeline provided, map out these financial needs indicating which age or age range the financial task would need to occur. Include at least six financial needs throughout the timeline. Examples of financial life cycle needs include developing and maintaining a spending plan, establishing savings, upgrading career training, investing in retirement, developing a will, etc. (6 points)
6. Choose two of the financial needs indicated on your timeline. Explain how completing these financial tasks would help you reach your goals. (2 points)
7. Identify three events that could occur in your life in the next five years that could alter the personal financial plan you outlined for your future. (3 points)
8. Why do financial plans change throughout a person’s life cycle? (1 point)