Each year, over a million people declare bankruptcy. And, Americans lose more than $1.2 billion in fraudulent investments. Both of these common difficulties occur due to poor personal financial planning. To effectively manage your personal finances: save regularly … earn honestly … spend wisely … give generously. |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073106712/360846/Ch01.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (46.0K)</a>]]>
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| 1 | Analyze the process for making personal financial decisions. | | 2 | Develop personal financial goals. | | 3 | Assess personal and economic factors that influence personal financial planning. | | 4 | Determine personal and financial opportunity costs associated with personal financial decisions. | | 5 | Identify strategies for achieving personal financial goals for different life situations. |
Now What Should I Do…?When Nina opened the letter from her aunt, she discovered a wonderful surprise. “My aunt has given me a gift of $10,000!” “Why would she do that?” asked Kevin. “I guess her investments have increased in value by much more than she needs. And she wants to share it with family members,” Nina responded. “I wonder what I should do with the money?” “Oh, I have some suggestions for you …” Kevin said. “Wait a minute. When did this become our money?” Nina asked. “Well, I just thought I’d offer some ideas,” Kevin suggested. After some discussion, Nina considered the following uses for the money: Credit card debt—use a portion of the money to pay off credit card bills from her last vacation. Savings—set aside money for a down payment on a house. Insurance—increase coverage on her health, life, and disability insurance. Long-term investments—invest the money in a tax-deferred retirement account. Career training—use the money for technology certification courses to enhance her earning power. Community donations—contribute funds to a homeless shelter and a hunger-relief organization.
“Wow, I could easily use $100,000 instead of $10,000! So what should I do?” asked Nina. “Some financial advisers recommend not doing anything for a least six months, since you could easily spend it on things with little lasting value,” warned Kevin. “Now I’m not sure what I should do!” QUESTIONS What Actions Should Be Taken? - What additional information do you need to know about Nina before determining which areas of financial planning should be her top priority?
- What actions do you recommend that Nina take before making a final decision about the use of these funds?
What about Your Situation? - What do you consider to be your main money concerns for the next six months? How about the next two years?
- What actions might you take to make better personal financial decisions?
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| Learn More Online | | Based on information at www.money.com, www.daveramsey.com, and Kiplinger.com, describe some advice that Nina might consider for her current and future financial planning activities. |  <![CDATA[<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073106712/LMO_icon.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (K)</a>]]> |
| Digital Study Tools | www.mhhe.com/kdh Online Learning Center Study Tools for This Chapter - Multiple-choice quiz
- Flashcards
- eLearning sessions
- Crossword puzzle
- Personal Finance Online: Time Value of Money
Student CD Study Tools for This Chapter - Self-study software
- Narrated PowerPoint
- Personal financial planning software: Worksheets 1-5
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