Chapter 11: Financial Planning for Your Future

Transcript:Chapter 11: Financial Planning for Your Future:
Chapter 11: Financial Planning for Your Future Learning intentions Chapter 11 Textbook page reference: 122 In this chapter you will learn to: Construct a personal financial life cycle to identify financial needs at different life stages Draft a personal financial life cycle to think about planning for your own financial needs Plan finances for different stages of your life. What is a personal financial life cycle? A personal financial life cycle shows the changing financial needs a person will have at each stage of their life. Chapter 11 Textbook page reference: 123 How your stage of life affects your personal financial life cycle Chapter 11 Textbook page reference: 124 People have different needs, wants, priorities and assets at different stages of their life. Financial planning Chapter 11 Textbook page reference: 124 An asset is something of value that you own. Financial planning Your estate is made up of everything you own. At the moment, it might be your bicycle, your books and your laptop or tablet. Later, it might include a car, a house and your savings. Chapter 11 Textbook page reference: 124 Financial planning Making a will is part of this planning process. A will is a legal document containing instructions for what should be done with personal money and property after death. Chapter 11 Textbook page reference: 124 How your stage of life affects your personal financial life cycle The main factors that may impact on your financial planning are: Employment status Age Number of dependents Health status Economic outlook Marital status Chapter 11 Textbook page reference: 125 When to plan and what to plan for Dependence stage: In your early years, you probably didn’t think about money, budgeting, saving or planning. You have been, and still are, very dependent on your parents or guardians for your financial needs. Chapter 11 Textbook page reference: 127 When to plan and what to plan for In your teens your key financial concerns will be: Full-time education and preparation for your career Income from part-time employment Considering future financial needs and resources. Chapter 11 Textbook page reference: 127 Independence stage At this stage people will probably be thinking about: Finishing education/apprenticeship/career preparation Starting work and building wealth Becoming financially independent Repaying student loans Beginning regular savings Buying/renting a home Household budgeting Insurance needs Starting a pension. Chapter 11 Textbook page reference: 128 Pensions A pension is a fund into which payments