Posts Tagged With: Financial Planning

Becoming Financially Disciplined

Whether you start at the beginning of the year or you start today, some actions to keep your financial plans on track include:

  • Set a money objective. Simplify your approach for financial goals by selecting a word or short phrase to give your direction. This theme might be “future needs” (for retirement planning), “spend mindfully” (for controlling spending), or “kid’s college.”
  • Use automation. Using automatic transfers will allow you to save for a house down payment, an emergency fund, a vacation, or retirement.
  • Challenge yourself. Cut unnecessary expenses to allow you to have money left over each month for financial goals.
  • Change your environment. Modifying your financial habits can occur with visible reminders, such as photos, sticky notes, or note cards placed on your credit card, desk, bathroom mirror, refrigerator, car dashboard, or computer screen. Also consider keeping a financial diary or journal.
  • Obtain needed support. Instead of going it alone, work with a friend, roommate, spouse, or group to achieve your money objective and stay accountable.

 For additional information on becoming financially disciplined, click on the following links:

Financially disciplined #1

Financially disciplined #2

Teaching Suggestions

  • Have students talk to others to obtain ideas for achieving financial goals.
  • Have students create visuals that might be used to remind them about financial goals and actions.

 Discussion Questions 

  1. What are the main reasons people who not achieve financial goals?
  2. Describe methods that might be used to help you and others achieve financial goals.
Categories: Chapter 1, Chapter 2 | Tags: , | Leave a comment

Trump’s Tax Plan and How It Affects You

“On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act.”

Fact:  Most Americans wonder how the current wave of tax reform will affect them.  This article by Kimberly Amadeo summarizes how the Act changes the amount of income tax that both individuals and businesses pay.

Significant changes in the Act for individuals include

  • Lower tax rates (highest rate in 2017 was 39.6 percent drops to 37 percent in 2018) could mean an increase in the amount individuals take home each payday.
  • Personal exemptions ($4,150 in 2017) per person are eliminated.
  • The standard deduction almost doubles for a single person ($6,350 in 2017) to $12,000. For married and joint filers the standard deduction ($12,700 in 2017) is now $24,000.
  • More taxpayers will opt to take the standard deduction instead of itemizing deductions.
  • For those taxpayers who choose to itemize, many itemized deductions that were previously allowed have been eliminated.
  • Taxpayers who itemize can still deduct charitable contributions, most mortgage interest, retirement savings, and student loan interest.
  • Taxpayers who itemize can still deduct up to $10,000 in state and local taxes.

For businesses, the largest and most signification change is lowering the maximum corporate tax rate from 35 percent to 21 percent beginning in 2018.

The article does provides more specific information about how the Tax Cuts and Jobs Act affects both individuals and businesses.

For more information, click here.

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Discuss how the Tax Cuts and Jobs Act will affect a single college student or a typical American family.
  • Explore how lower corporate taxes could impact economic growth, worker salaries, unemployment rates, job creation, and other factors that impact both the nation and individuals.

Discussion Questions

  1. Given the information contained in this article and other reports, do you think the Tax Cuts and Jobs Act is good for you? Explain your answer.
  2. For an individual, what effect does lower taxes have on your spending, savings and investments, and retirement planning?
Categories: Chapter 3, Financial Planning, Taxes | Tags: , | Leave a comment

Personal Financial Satisfaction

The Personal Financial Satisfaction Index (PFSi), reported by the AICPA (American Institute of Certified Public Accountants) is at an all-time high.  This quarterly economic indicator measures the financial situation of average Americans.  PFSI is the difference between (1) the Personal Financial Pleasure Index, measuring the growth of assets and opportunities, and (2) the Personal Financial Pain Index, which is based on lost assets and opportunities. The most recent report had a Pleasure Index 68.1 in contrast to a Pain Index of 42.1, resulting in a positive reading of 25.9, the highest since 1994.

While the stock market is high, unemployment is declining, and inflation is low, remember the economy is cyclical.  Be sure to consider and plan for your long-term goals. Stay aware and position your financial plan appropriately to safeguard finances when the economy is in a downturn.  Also, analyze your cash flow to an attempt to increase savings, including an appropriate emergency fund.

For additional information on financial satisfaction, click here.

Teaching Suggestions

  • Have students create an action plan for situations that might be encountered in times of economic difficulty.
  • Have students create a team presentation with suggestions to take when faced with economic difficulties.

 Discussion Questions 

  1. What are examples of opportunities that create increased personal financial satisfaction?
  2. Describe actions a person might take when faced with economic difficulties.
Categories: Chapter 1, Chapter 2, Economy, Financial Planning, Investments, Retirement Planning, Stocks | Tags: , , , | Leave a comment

Hurricane Financial Toolkit

Natural disasters create a need for unique actions.  After physical safety is assured, some of the activities related to finances include:

  • contacting your insurance company – request a copy of your policy, take photos and videos to document your claim.
  • registering for assistance at DisasterAssistance.gov or call 1-800-621-3362.
  • talking with your mortgage lender and credit card companies since you may not be able to make upcoming payments on time.
  • contacting utility companies to suspend service if you will not be living in your home due to damage.

Beware of various scams that surface after natural disasters.  These frauds can include phony repairs, deceptive contractors, requiring up-front fees, fake charities, and misrepresenting oneself as an insurance company agent or government representative to obtain personal information.

Assistance for the personal and financial chaos created by a hurricane or other natural disaster may be obtained from these organizations:

For additional information on financial actions for disasters, click here.

Teaching Suggestions

  • Have students role play situations that might require actions such as those described in this article.
  • Have students create a video with suggestions to take when encountering a natural disaster.

Discussion Questions 

  1. How might the advice offered in this article be communicated to people who are victims of a natural disaster?
  2. Describe common mistakes people might make when encountering a natural disaster.
Categories: Chapter 1, Chapter 3, Financial Planning, Frauds and Scams, insurance | Tags: , , | Leave a comment

Innovation for Improved Financial Health

Mobile start-up companies and other organizations are working with financial institutions to assist consumers with apps and websites that address various financial tasks and concerns.  These include:

  • Albert (www.meetalbert.com) is a mobile app to guide your financial decisions with the assistance of various financial institutions.
  • EARN (www.earn.org) is a national nonprofit to help low-income families create a habit of saving and break the cycle of financial instability.
  • eCreditHero (www.getcredithero.com) is designed to fix errors that appear on an estimated 80 percent of the credit reports of Americans.
  • Scratch (www.scratch.fi) helps borrowers to better understand, manage, and repay loans.
  • WiseBanyan (www.wisebanyan.com) is a free financial advisor that suggests and manages investment plans for various financial goals, such as savings for retirement, creating an emergency fund, and buying a home.

For additional information on innovative financial planning apps, click here.

Teaching Suggestions

  • Have students search for a website or app that would be of value of improved personal financial planning.
  • Have students talk to others about the financial concerns they face. Ask students to propose an app or website that would address a personal finance concern.

Discussion Questions 

  1. What personal financial planning areas provide people with the most difficulty?
  2. Describe potential apps or websites that might be created to assist people with their personal financial planning activities?
Categories: Chapter 1, Chapter 2, Financial Planning | Tags: , | Leave a comment

Smart Money Moves for January

With a new year, many people hope to get a fresh start with changes in their financial planning activities. To do so, the following actions are suggested:

  • Maintain or increase the amount of money in your emergency fund.
  • Pay off high-interest credit cards and other expensive loan accounts.
  • Set goals that will contribute to long-term financial security.
  • Review your cash flow (spending and income) from the previous year in an effort to increase saving by avoiding unnecessary payments.
  • Merge various banking, investment, and retirement accounts into one low-cost account.
  • Determine if changes are needed in your estate plan.
  • Increase your retirement account contributions.
  • Revise your tax withholding, as needed

For additional information on January money moves, click here.

Teaching Suggestions

  • Have students talk to various people about which actions they believe to be most valuable for long-term financial security.
  • Have students create a brief presentation describing the value of one of these suggested money actions.

Discussion Questions 

  1. Describe the January money actions that you consider to be most valuable for long-term financial security.
  1. What are some other money moves that you would recommend?
Categories: Chapter 1, Chapter 2, Financial Planning | Tags: | Leave a comment

Financial Fears

According to the Northwestern Mutual Planning and Progress Study on financial well-being, Americans have several worries.  Based on interviews with 2,646 adults, 85 percent of respondents reported financial anxiety in some form.  Approximately two-thirds of those surveyed indicated that financial anxiety negatively affected their health.  In addition, 36 percent of those responding had increasing levels of financial anxiety over the past three years.

In the study, the greatest financial fears were:

  1. Having an unplanned emergency
  2. Having unplanned medical expenses
  3. Having insufficient savings for retirement
  4. Outliving retirement savings
  5. Becoming a financial burden
  6. Not able to afford healthcare
  7. Loss of a job
  8. Identity theft
  9. Extended unemployment
  10. Death/loss of primary wage earner
  11. Having poor credit
  12. Having to file bankruptcy
  13. Being a victim of a financial scam

To address these concerns, the study recommends the following actions:

  • build an emergency fund for unplanned expenses
  • invest properly for retirement and long-term financial security
  • review your finances regularly to revise goals and savings activities

These actions can help to reduce the financial anxiety reported by a large portion of Americans.

For additional information on financial anxiety, go to:

Link #1

Link #2

Categories: Chapter 1, Chapter 2, Financial Planning | Tags: , | Leave a comment

The 1-Page Financial Plan: 10 Tips for getting what you want from Life

Carl Richards, author of The One Page Financial Plan, knows the financial mistakes–including the ones he has made–that people make.  Based on his experience as a financial planner, he provides 10 tips to help people get what they want from life.  Note:  An explanation and examples to illustrate each tip are provided in this article.  His tips are:

  1. Ask why money is important to you.
  2. Guess where you want to go.
  3. Know your starting point.
  4. Think of budgeting as a tool for awareness.
  5. Save as much as you reasonably can.
  6. Buy just enough insurance today.
  7. Remember that paying off debt can be a great investment.
  8. Invest like a scientist.
  9. Hire a real financial advisor.
  10. Behave for a really long time.

For more information, click here. 

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Illustrate how each tip provided in this article could affect an individual’s financial plan.
  • Encourage students to read the entire article to help determine what’s really important in their life.

Discussion Questions

  1. It’s often hard (or maybe close to impossible) to determine what you value and where you want to go in the next 20 to 30 years with perfect accuracy. Still, experts recommend that you establish a long-term financial plan.  What steps can you take to make sure your plan will meet your future needs?
  2. Why is it important to evaluate your plan on a regular basis and make changes if necessary?
Categories: Chapter 1, Chapter_14, Financial Planning, insurance, Retirement Planning | Tags: , , , | Leave a comment

How the Presidential Election Will Affect Your Investment Strategy

“The sky is falling!  If my chosen candidate doesn’t win, the markets are doomed and so are my investments.”

In this article, Bijan Golkar points out that a presidential election can cause excitement or despair depending on if you are a Republican or a Democrat and who the major parties nominate for the highest and most powerful office in the world.

The article discusses market returns both before and after a presidential election year and some of the underlying reasons for market volatility.  Then the article stresses the importance of a person’s long-term goals and a plan for long-term growth as opposed to “emotional investing.”  Finally, the article discusses the pros and cons of our economy that could affect investment values.

For more information, click here. 

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Discuss the importance of a long-term investment plan that will take advantage of the time value of money.
  • Describe some of the pitfalls of “emotional investing.”

Discussion Questions

  1. What are the typical characteristics of an emotional investor? Of a long-term investor?
  2. What are the advantages of a long-term investment program when compared to “emotional investing?”
Categories: Chapter 1, Chapter_11, Economy, Financial Planning, Investments, Savings | Tags: , , | Leave a comment

How to Find a Financial Advisor

“Finding your next financial advisor is as easy as counting from one to five.  You just need to know where to look and what to ask.”

The information in this article is provided by the National Association of Personal Financial Advisors (NAPFA) and was developed to help people find a financial advisor.  Specific suggestions include

  1. Before beginning a search for a financial advisor, have a conversation with your loved ones to determine what is important, what you value, and what you want to accomplish.
  2. To develop a list of potential advisors, talk to friends and relatives and visit websites like http://www.napfa.org.
  3. Narrow your list to the top three contenders then do your homework. Visit company websites and read each advisors biographical sketch, check information available on the SEC website (www.sec.gov), and develop a list of questions that you want to ask when you meet each advisor.
  4. Request a meeting with each potential advisor. Ask questions to help assess your comfort level with each advisor.  For help, visit the NAPFA website (www.napfa.org) and click on “Tips and Tools.”
  5. Often the key to building a relationship with a financial advisor is communication. Review your relationship with a financial advisor over time.  Don’t just look at investment results, but also determine if the advisor (and her or his firm) is helping you achieve your important goals.

For more information, click here.

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Remind students that it is better to start financial planning earlier rather than later in life.
  • Stress that even beginning investors or investors with little money can still use a financial advisor.
  • Encourage students to visit the National Association of Personal Financial Advisors website (www.napfa.org). There is a great deal of quality information available with a click of a mouse.

Discussion Questions

  1. Often, the first step when choosing a financial advisor begins before you actually meet a potential advisor. How can determining your goals and what you value help you start financial planning?
  2. While many investors think that financial advisors are only for the rich, beginning investing or investors with little money can benefit from professional help. What steps can you take to find the right financial advisor to help you obtain your goals?
Categories: Chapter 1, Chapter_11, Financial Planning, Retirement Planning | Tags: , | Leave a comment

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