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Personal Finance
Bennie Waller
[email protected]
434-395-2046
Longwood University
201 High Street
Farmville, VA 23901
Bennie D Waller, Longwood University
Financial Planning
Bennie D Waller, Longwood University
Financial Planning
The Financial Planning Process
 It’s easier to spend than to save.
 Personal financial planning is an ongoing process—it will
change as your life changes and financial needs change.
 A financial plan can help you manage and control your
finances.
 As well as help you to achieve financial and lifestyle goals.
 If you don’t know where you are going, any road will
get you there!
Bennie D Waller, Longwood University
Five basic steps to personal financial planning
1. Evaluate your financial health
2. Define your financial goals
3. Develop a plan of action
4. Implement your plan
5. Review your progress, reevaluate, and revise your plan
Bennie D Waller, Longwood University
Five basic steps to personal financial planning
1. Evaluate your financial health
i.
How much do you currently earn?
ii. What are you spending and on what? – Good financial
record keeping is important.
2. Define your financial goals
i.
Commit your goals to papers (formalize them)
ii. Attach costs to each goals
iii. What is the timeframe for this goal?
Bennie D Waller, Longwood University
Five basic steps to personal financial planning
3. Develop a plan of action
i.
Expect the unexpected (be flexible)
i.
Have necessary liquidity
ii. Protect yourself against unforeseen factors with insurance.
iii. Learn to minimize taxes
4. Implement your plan - Be tenacious in carrying out your planJust do it!!
5. Review your progress, reevaluate, and revise your plan – be
prepared to revise your goals for changes in your life. Change
will happen.
Bennie D Waller, Longwood University
Setting Financial Goals
 Short-term—within 1 year
 Paying off bills/credit cards, buying insurance, saving for
emergency funds (3 months of living expenses)
 Intermediate-term—1 to 10 years
 Saving for down payment on a home, paying off big debts
(mortgages), financing large items (wedding or vacation home)
 Long-term—more than 10 years
 Saving for children’s college, retirement, start a business
Bennie D Waller, Longwood University
Financial Plans
Four areas that should be considered in financial planning:
Flexibility: Your plan should provide enough flexibility that not every
dollar of income is committed when bad things, such as emergencies, or
good things, such as a good investment opportunity, occur. To maintain
flexibility, try to plan for the unplanned.
Liquidity: Your plan should allow for access to money when needed. That
is money that you can easily access or use, without loss of value.
Protection: Insurance is necessary to protect from costly, unexpected
expenses such as flood, fire, major illness, or death. No one can predict if,
or when, but without insurance the cost could devastate your finances. Your
plan should also protect you from overpriced insurance.
Minimization of Taxes: Investment earnings can quickly shrink due to
taxes. Plan ahead for taxes as part of your financial plan.
Bennie D Waller, Longwood University
The Early Years – Time of Wealth Accumulation
 Prior to age 54 – You should develop a regular savings pattern,
determining how much you can save and where to invest? You
can afford to take a few more calculated risks during these
years.
 Cost of raising children
Bennie D Waller, Longwood University
Approaching Retirement – Golden Years
• The years between ages 55-64 – will depend on
how well you saved for retirement. You will
likely need to reassess goals concerning
retirement and estate planning.
Retirement
• After retirement you will need to live off savings.
You will choose a less risky investment strategy,
consider long-term care for yourself and spouse
and get estate and wills in order.
Bennie D Waller, Longwood University
Thinking about a major/career
Bennie D Waller, Longwood University
Thinking about a major/career
• What are your interests, skills, values? - What
kind of lifestyle would you like?
• You should research career alternatives that
match your skills and interests keeping in mind
potential earnings
Bennie D Waller, Longwood University
Getting a job and being successful
• Have a professional resume
• Start looking early
• Do at least one internship (unpaid if that is all you can find)
• Prepare and practice for interviews
• Research the company
• Dress appropriately, be confident, and follow-up
• Develop a profession network and seek out new
assignments
• Be ethical
Bennie D Waller, Longwood University
Earnings by majors
Bennie D Waller, Longwood University
What determines Income?
• Skills, education and martial status.
Bennie D Waller, Longwood University
10 Principles of Personal Finance
1.The best protection is knowledge
2.Have a plan
3.Understand Time value of money
4.Understand taxes
5.Expect unexpected (liquidity)
6.Differentiate wants from needs
7.Protect yourself
8.Understand risk relative to return
9.Don’t play financial mind games
10.Pay yourself first
Bennie D Waller, Longwood University
Thank You
Bennie D Waller, Longwood University