Personal Financial Planning

A formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends future financial activities

• Balance Sheet

• Cash Flow Statement

• Budget

• Financial plan

the things you want to accomplish.

• Mission

• Goals

• Target

• Strategy

How do you begin your financial planning process

• determine your current financial situation

• identify your options

• evaluate your alternatives

• create a plan of action

The last step in the financial planning process is to

• develop financial plans and strategies to achieve goals

• use financial statements to evaluate results of plans and budgets, taking corrective action as required

• implement financial plans and strategies

• redefine goals and revise plans and strategies as personal circumstances change

Budgeting finances requires calculating ________ and ____________.

• Income; expenses

• Investments; savings

• Utility; opportunity cost

• Inflation; taxes

The purpose of personal financial plan is to what...?

• create your best possible financial future.

• to see how little you have compared to other people and then use that as inspiration to do better

• help you avoid common financial pitfalls and accomplish your goals

• All of the above

Why do people choose to stay at home?

• save money

• moving out is expensive

• they don't feel ready to move out yet

• all of the above

The 3rd step in the financial planning process is

• Create a financial plan of action

• Develop your financial Goals

• Identify alternative courses of action

• Evaluate your alternatives

Money spent on different items; items that are necessary for maintaining a household, and some are chosen.

• Expenses

• Income

• Collateral

• Cash flow

Money received for work or other sources such as interest earned, child support, alimony, or dividends from stocks.

• Income

• Expenses

• Net worth

• Net pay