Unit 1: Budgeting Financial Goals Mr. Elsesser Introduction to Financial Management
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Unit 1: Budgeting Financial Goals
Mr. ElsesserIntroduction to Financial
Management
“Most people don’t plan to fail…They simply fail to plan!”
Objective: Define Financial PlanningUnderstanding the importance of setting goals and to modify and monitorExamine the value of having a plan to use moneyDefine SMART GoalsDescribe decision making processes
Do Now: Let’s begin with the end in mind……
Where do you see yourself in 10yrs?
What is Financial Planning?
A process of setting goals, developing a plan to achieve them, and putting the plan into action.
Have you heard of the terms “in the red” or “in the black”in regards to finance?
“In the black” = making money“In the red” = losing money
The Five-Step FinancialPlanning Process
S-M-A-R-T GOAL CRITERIA
Specific
Measurable
Attainable
Realistic
Time-Limited
SMART Goals
Specific……..An Exact Statement of your desiresEx: “Pay for lodging, transportation, meals for a 5-day trip to Washington, D.C.”
Measurable…
Attainable…..
Realistic…….
Time-Limited..
Defining your monetary contributionEx: “$300 through fundraising, $50 from birthday money, save $25 a week.”
Can this really be accomplished?“If I stick to my plan, I’ll have the money when I need it.”
Keeping your goal feasible for your current financial situation.Ex: “I still have enough money to live on while I work toward this goal.”
What is the time frame for this goal?Ex: “I need to have all the money by 6 months from now.”
• SHORT-TERM GOALS –Within three months
• INTERMEDIATE-TERM GOALS–Three months to a year
• LONG-TERM GOALS –More than a year
Identifying Term Goals
Let’s close lesson with watching a video clip
What about you?
What Kinds of Factors AffectDecision Making?
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Wants
Family
Values
TimeMoney
Needs
Habits
Motivation
Education
Age
Attitudes
SocietyCulture
Exploring Wants and Needs:
Wants and Needs are factors that have a direct impact on the decisions that we make. Financial planning requires you to set priorities here. WANTS:
Things that you do not have to have to survive.
NEEDS: Things that you must have to survive.
Balancing these are crucial!!! WHY?
Exploring Wants and Needs:
ACTIVITY:Identify your own wants and needs…3 NEEDS:
1. 2. 3.
3 WANTS: 1. 2. 3.
Do you see any issues here?
The Decision- Making Process
EvaluateResults
Make a Decision
Identify YourGoal
Weigh Pros and Cons
EstablishCriteria
Monitor & Modifythe Plan
Implement the Plan
Set Goals
Create a Plan
AnalyzeInformation
The Financial Planning Process
Decision Making and Financial Planning
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