Chapter 1 Planning Your Financial Future: It Begins Here
9
Financial Planning
You, as a teen or young adult, have been using money for much of your
life. Do you think about where your money goes or how you’re spending
it? Do you think about saving money? You have a responsibility to use your
money wisely. Teens and young adults can be responsible with their money if
given the right information. You are accountable for your future.
Have you heard of the term fi nancial planning? A fi nancial plan is a set
of goals for acquiring, saving, and spending money. The plan also includes
actions or strategies for achieving the goals. Do you want to just “get by” and
live from paycheck to paycheck throughout your life, or do you want to be
free from fi nancial worry? Will you leave your fi nancial security to chance
or follow a plan for acquiring and spending money? Having a fi nancial plan
helps you be in control of your fi nancial situation and achieve your goals.
This text will give you information you need to begin a lifetime fi nancial
plan and start you on your way to becoming fi nancially secure. Some of the
information may be familiar to you; some may be completely new. In either
case, the information will be valuable in securing your fi nancial future. You are
now on your way to becoming money smart.
Check
Your
Understanding
Why is fi nancial planning important?
Financial Goals
Goals are something that you work toward or strive to achieve. Financial
goals are measurable objectives related to acquiring or spending money. You
may have simple short-term goals, such as buying a new shirt or a gift for your
friend’s birthday. Other short-term goals might be to earn money and purchase
a car. Long-term goals might include buying a house or retiring at age 50.
Setting goals is an important fi rst step in creating a fi nancial plan. Planning
is essential before fi nancial goals can be met. Most people do not have enough
money to buy everything they want without planning and saving their money.
For example, a family paying for a child’s college education probably did not
start saving money when the child was 16 or 17. They probably began saving
years earlier and have made sacrifi ces to save enough to achieve this goal.
You will always have choices to make with your money. You may have
to give up things you want now in order to be fi nancially secure later. Setting
both short-term and long-term goals now will help you achieve many things
you want for your future.