EMC Publishing, LLC Values are the beliefs & principles you
consider important, correct, and desirable; they influence your
financial decisions.
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EMC Publishing, LLC 6 Steps in Financial Planning Process
1.Determine your current situation. A.Determine income B.Determine
expenses 2.Identify and prioritize your goals. A.Distinguish
between needs (a must for survival) and wants (things you would
like to have)
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6 Steps in Financial Planning Process 3.Develop a long term
plan and implement it; adjust your plan and goals over time
4.Organize your recordsalphabetical, numerical, or chronological;
manage your money with a computer-based system
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6 Steps in Financial Planning Process 5.Set up a budget 6.Keep
it simple.
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What do you think? Discussion EMC Publishing, LLC What do you
value? What do you think most Americans your age value? How do your
values affect how you spend your money?
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EMC Publishing, LLC Sharing Sharing is also called charitable
giving, philanthropy, and altruism. Sharing connects people and
gives them a sense of pride. Volunteer some of your time with an
organization that meets your interests.
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EMC Publishing, LLC Paying Taxes Types of Taxes Social Security
/ Medicare Sales Property Estate Income User fees FICA
Slide 10
EMC Publishing, LLC Paying Taxes: Forms Form W-4: Withholding
Form W-2: Wage and tax statement
Slide 11
EMC Publishing, LLC Paying Taxes: Forms Form 1040EZ Form 1040A
Form 1040 State and local
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EMC Publishing, LLC +$20,179 (Wages) +$15 (Interest) +$650
(Unemployment) $2,000 (Student Loan) ---------------- $18,844 (AGI)
Calculating Your Taxes Adjusted gross income (AGI) = sum of all
sources of income adjustments Wages / business income Interest
income Unemployment Social Security / pensions IRA contributions
Student loan payments
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What do you think? Discussion EMC Publishing, LLC Why do we pay
taxes? What type of taxes do you pay? What type of taxes are the
most fair? What are some examples of tax deductions and tax
credits?
Slide 14
Personal Finance Chapter 4
Slide 15
Defining Your Goals Kinds of Goals Distinguish between
short-term, medium-term, and long-term goals. Short-term (up to
five years) Medium-term (five to ten years) Long-term (ten or more
years)
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Defining Your Goals Asking Questions Identify your financial
goals: What kind of housing do I want? Where do I want to live?
What job do I want? What about my family life? What will I do for
recreation? How much money will I need?
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Defining Your Goals Asking Questions Start planning to achieve
your financial goals: How do I get there from here? What sacrifice
does it take to achieve my goals? Do my spending habits match my
goals?
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Defining Your Goals Goal Chart
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Creating a Budget Balancing Goals A budget helps you achieve
your goals.
Slide 20
Creating a Budget Cash Flow Estimate your income. Estimate your
expenses. Estimate your savings. Estimate your sharing.
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Creating a Budget Creating a Cash Flow Statement Record your
income. Fixed incomesteady Regular wages / salary Variable
incomechanges Overtime Side jobs Mowing lawns Babysitting
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Creating a Budget Creating a Cash Flow Statement Record your
expenses. Fixed expensesstay the same month to month Rent / house
payment Car payment Food Utilities (electric, gas, cable TV,
etc.)
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Variable Expenses Car repair$125 Dentist co-pay$15 Dancing$20
New Tire$75 Creating a Budget Creating a Cash Flow Statement Record
your expenses. Variable expensesthose that change month to month
Auto repairs Medical expenses Entertainment / dates Unexpected
emergencies
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Using Your Budget Creating a Budget Use cash flow statements.
Note surpluses and deficits.
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Using Your Budget Qualities of a Good Budget Based on your
values Geared toward your goals Practical Flexible Accessible and
easy to use Budget Excellent
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Using Your Budget Accounting Records Income Expenditures
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Using Your Budget Assessing Constantly assess and reassess
budget. Revise when necessary. Fixed Expenses Rent$450 Car
Payment$250 Food$275 Utilities$125 Fixed Expenses Rent$475 Car
Payment Food Utilities
