Your Financial Plan:Your Financial Plan:Where It All BeginsWhere It All Begins

The Five-Step Financial The Five-Step Financial Planning ProcessPlanning Process

NEEDSNEEDS Food for Food for

breakfastbreakfast Clothes for Clothes for

schoolschool Transportation Transportation

to school or workto school or work ____________________________ ____________________________

WANTSWANTS An iPODAn iPOD DVD PlayersDVD Players Cell PhoneCell Phone Fancy CarFancy Car ____________________________ ____________________________

Saving money over time to make a Saving money over time to make a major purchase.major purchase.

Waiting to buy a new product until the Waiting to buy a new product until the price goes down.price goes down.

Waiting to see the latest movie until Waiting to see the latest movie until the crowds get smaller and the lines the crowds get smaller and the lines shorter.shorter.

S-M-A-R-TS-M-A-R-T GOAL CRITERIA GOAL CRITERIA

SSpecificpecific

MMeasurableeasurable

TTime-Limitedime-Limited

RRealisticealistic

AAttainablettainable

Step 1 – Set SMART GoalsStep 1 – Set SMART Goals

Specific“I want to go to Daytona for Spring Break” is more specific than “I want to go somewhere fun over Spring Break”

Measurable“I’ll need $150 for my share of the hotel room for the week” is measurable; “I want to save a bunch of money for the trip” is not.

Attainable“I’ll split the driving with my friends and take $200 more for gas, food, and other spending” is much more attainable than “I want $500 to fly there and $700 for spending money.”

Realistic“I’ll save $60 a month from my paycheck for the next six months” is more realistic than “I’ll buy lottery tickets every week”

Time Bound“I want to save all the money by March 1st” gives you a specific date from which to plan backwards, unlike “I want to save all the money by spring.”

SMART GoalsSMART Goals

SSpecific……..pecific……..

MMeasurable…easurable…

TTime-Limited..ime-Limited..

RRealistic…….ealistic…….

AAttainable…..ttainable…..

“Pay for lodging, transportation, meals for a 5-day trip to Washington, D.C.”

“$300 through fundraising, $50 from birthday money, save $25 a week.”

“If I stick to my plan, I’ll have the money when I need it.”

“I still have enough money to live on while I work toward this goal.”

“I need to have all the money by 6 months from now.”

SHORT-TERM GOALSSHORT-TERM GOALS Within three monthsWithin three months

INTERMEDIATE-TERM GOALSINTERMEDIATE-TERM GOALS Three months to a yearThree months to a year

LONG-TERM GOALSLONG-TERM GOALS More than a yearMore than a year

Setting SMART Financial GoalsSetting SMART Financial Goals

““Most people don’t plan to fail…Most people don’t plan to fail…They simply fail to plan!”They simply fail to plan!”

Individual Assignment: My SMART Goals

▪ On the back of your packet, list 3 personal financial goals (one short, one intermediate, and one long-term)

▪ Determine if each is a want or a need

▪ Include how much each item will cost and how long it will take you to get it