FIN1 FTU - Stage 4

F1 – Project-Stage 4: Setting Personal Financial Goals TCHE322 Lawrence et al (2011). Chapter 1 Thomas (2009). Chapter 3 1 Personal finance planning Personal finance planning process 1. Define financial goals. 2. Develop financial plans and strategies to achieve goals. 3. Implement financial plans and strategies. 4. Periodically develop and implement budgets to monitor and control process toward goals. 5. Use financial statement to evaluate results of plans and budgets, taking corrective action as required. 6. Redefine goals and revise plans and strategies as personal circumstances change. Essential Information of personal financial plans * 1. A summary of the goals 2. Significant assumptions and justification 3. Estimates 4. Recommendations 5. A description of limitations on the work performed 6. The recommendations in the engagement should contain qualifications to the recommendations if the effects of certain planning areas on the client’s overall financial picture were not considered. * Adapted from Paragraph .35, Statement on Standards in Personal Financial Planning Services No. 1 3 Schedule of lectures Project topic covered • Identify your income • Identify your short term, medium- and long-term financial goals Groupwork project activities • Identify what you want • Setting short-term, medium- and long-term financial goals aligning with career goals 4 Setting financial goals • Setting goals helps you visualise the gap between your current financial status and where you want to be in the future. Values identification Financial goals follow values Financial goals: specific objectives to be attained through planning and management effort. • Examples of general financial goals: finishing a college education, paying off debts (including education loans), meeting financial emergencies, taking a vacation, owning a home, accumulating funds to send children through college, having financial independence at retirement. None of these goals, however, is specific enough to guide financial behaviour. 5 Welcome to TCHE302