tailieunhanh - Lecture Focus on personal finance: An active approach to help you develop successful financial skills (2e) - Chapter 1
Chapter 1 - Personal financial planning in action. In this chapter, you will learn to: Identify social and economic influences on personal financial goals and decisions, develop personal financial goals, calculate time value of money situations associated with personal financial decisions, implement a plan for making personal financial and career decisions. | 1 Personal Financial Planning in Action Objective 1: Identify Social and Economic Influences on Personal Financial Goals Financial Planning: process of managing your money to achieve personal economic satisfaction. Financial Plan: formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends future financial activities. What types of decisions are part of financial planning? What happens to people without a financial plan? Objective 1: Identify Social and Economic Influences on Personal Financial Goals Advantages of Financial Planning Increased effectiveness in obtaining, using, and protecting financial resources. Increased control of financial affairs. Improved personal relationships. A sense of freedom from financial worries obtained by looking to the future. Other? (., reaching future goals) Objective 1: Identify Social and Economic Influences on Personal Financial Goals Adult life cycle stage. Marital status, household size, and employment. Major events. Graduation, marriage, divorce. Birth or adoption of child. Career or health changes. Values. What are the ideas and principles you consider correct, desirable and important? Life Situation and Personal Values Financial Planning in Our Economy Economy’s influence on financial planning Phases of the business cycle: expansion, peak, contraction, trough (takes 4-5 years on average) Economics: the study of how wealth is created and distributed; strongly influences financial planning Role of the Federal Reserve (., interest rates, money supply) Financial Planning in our Economy Inflation is a rise in the general level of prices Inflation reduces the buying power of the dollar Is most harmful to people living on fixed incomes Inflation rates have varied over time (10-12% in early 1980s) The CPI (Consumer Price Index) is a measure of inflation Many people face hidden inflation (not spending like CPI) Financial Planning in our Economy Interest Rates represent . | 1 Personal Financial Planning in Action Objective 1: Identify Social and Economic Influences on Personal Financial Goals Financial Planning: process of managing your money to achieve personal economic satisfaction. Financial Plan: formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends future financial activities. What types of decisions are part of financial planning? What happens to people without a financial plan? Objective 1: Identify Social and Economic Influences on Personal Financial Goals Advantages of Financial Planning Increased effectiveness in obtaining, using, and protecting financial resources. Increased control of financial affairs. Improved personal relationships. A sense of freedom from financial worries obtained by looking to the future. Other? (., reaching future goals) Objective 1: Identify Social and Economic Influences on Personal Financial Goals Adult life cycle stage. Marital status, household size,
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