Copyright Goodheart-Willcox Co., Inc. 59 how you would evaluate your own individual need for financial planning. 2. Financial planning provides benefits for families and individuals in personal ways. Name two personal benefits that you can experience through financial planning. Why are these benefits important to you? 3. The first step in creating a budget is to establish personal financial goals. Think about the next 12 months. What are your short-, medium-, and long-term goals? Using Figure 2-1 as an example, create a list of your financial goals. 4. Create a budget for the upcoming month that will help you meet your personal financial goals. Using Figure 2-3 as an example, create a spreadsheet. If you do not have access to a computer, use a sheet of paper. Fill in headings for each type of information that should be entered. If the types of income and expenses you have are not the same as the example, enter ones more appropriate for you. Next, fill in the estimated column for income and expenses that you anticipate in the coming month. 5. At the end of the month, you will complete your budget. Using the spreadsheet you started in the last activity, enter the actual amounts you spent in the actual column. Next, analyze your budget. Did you have any discretionary income at the end of the month? Write a paragraph on what you learned from this activity. 6. Your net worth is the difference between what you own and what you owe. List all of the assets that you own and their current value. Examples include a savings account, mountain bike, or car. Next, list all of your liabilities. Examples include unpaid bills, a credit card balance, and money you owe to a friend. Using the net worth statement in Figure 2-7 as an example, organize this information into a net worth statement. Then, use a spreadsheet, a calculator, or money management software to calculate your net worth. Do you have a positive or negative net worth? Perform data analysis on your findings. 7. Financial management includes keeping records that cover your life span. Make a list of the types of documents you should keep and evaluate their importance. Ask your parent or guardians for a copy of each, and start a filing system for your records. What type of storage container will you use? 8. Keeping expense records is an important part of financial management. For the next month, keep a receipt for every purchase you make. If you buy something that doesn’t come with a receipt, such as at a vending machine, create your own receipt on a piece of paper. Organize your receipts by date of purchase, category, or some other method. Put them in the filing system you created in the last activity. Analyze which expenses were planned and which ones were unplanned. 9. One of the benefits that comes from personal financial planning is economic self-sufficiency. Define what economic self-sufficiency means to you. Describe how you can maintain economic self- sufficiency throughout your adult life. 10. Financial planning is important at every stage of the family life cycle. Describe how family financial planning is affected by the family’s size, their geographic location, and the members’ stage in the life cycle.
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