Personal Finance Bill Klinger
Personal Finance • Introductions • Me • You • Syllabus • Class procedures • Class expectations • A study showed that 83% of people who lost their job, lost it because of attendance or attitude. • Check out • money.cnn.com Personal Finance tab • investor.vanguard.com
Financial Decisions Should I buy a car or pay off my credit card first? How big of a house can I afford? What should I invest in? Do I have enough insurance? Will I be able to retire early? Should I take the cash value or the annuity in the lottery?
Financial Planning Why bother? What is it? Do you need a financial advisor?
Financial Plan Budgeting and tax planning Managing liquidity Financing large purchases Insurance Investing Retirement and estate
Budgeting • Start with after-tax income • Identify expenses • Remainder is saving • Opportunity cost • What you give up as a result of a decision • What are the opportunity costs of • Buying an expensive car? • An unlimited data plan for your phone? • Buying Starbucks coffee every day? • How much do you save?
Cash Flow Income saving spending “Cash” Expenses investments deposits credit Retirement & Estate Liquidity loans premiums investments Investing Financing Insurance
Financial Plan • Goals • Short • Intermediate • Long-term • Current financial position • Alternatives / Options • Establish plan • Track your finances • Revise as conditions change