TOPIC 1 personal finance

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The bank offers its Personal Financial Statement to assist with your planning.

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The Consumer Financial Protection Bureau defines financial well-being as a state wherein you: (1) Have control over day-to-day, month-to-month finances; (2) Have the capacity to absorb a financial shock; (3) Are on track to meet your financial goals; and (4) Have the financial freedom to make the choices that allow you to enjoy life.

Learning goals

By the end of this topic, you should be able to:

Identify the key components of a financial plan
Outline the steps involved in developing your financial plan

SECTION OUTLINE

Topic 1 Financial Planning

1.1 Some General Points

1.2 What is Personal Finance?

1.3 Developing Your Financial Plan

Content Videos

The Gus A. Stavros Center for the Advancement of Free Enterprise and Economic Education at Florida State University is pleased to offer these resources. They were created by Teaching Professor Joe Calhoun.

The captions were created by a computer program so sometimes they may be inaccurate or contain spelling or grammatical errors.

You may alternate the views by clicking on the white icon on the top-right corner of the screen.

The videos should not be downloaded or distributed beyond this site.

KEY POINT

Personal finance is the process of planning your income generation, spending, financing, insurance, and investing to optimize your financial situation.

Conversation with Coach Chris

Chris Hogan is the author of two #1 national best-selling books: Everyday Millionaires (2019) and Retire Inspired: It's Not an Age; It's a Financial Number (2016). While visiting Florida State University, he met with Stavros Center Director Joe Calhoun to discuss a variety of topics. In this segment, get to know Coach Chris and how he got involved in financial education.

In this segment, they discuss aspects of personal finance.

Certified Peer Mentors

Mentors give presentations to groups about our topics. They also assist other students in personal finance matters and answer questions during individual meetings. To schedule a presentation or an appointment to discuss your situation email coss-financialpeermentor@fsu.edu or visit the Stavros Center financial wellness page.

A TOPICAL STORY

“The Long Run”

Jayla pushed her empty cart through the rows of books. She had shelved the last of the new shipment, completing the day’s tasks. Jayla did not particularly enjoy her job at Barnes and Noble, but it was a job, nonetheless. She surmised she would rather be employed than unemployed. Quickly placing the book cart back in its corner, she returned to her station at the Customer Service desk, taking the seat next to her coworker.

“You’re doing an amazing job, you know,” her coworker said upon Jayla’s arrival.

“All in a day’s work, Madison,” Jayla said with a light shrug. “I’m just excited to spend my first paycheck! As soon as my shift ends, I’m heading straight to the mall!”

Madison checked the gray clock on the wall. “That's in nine minutes,” Madison stated.

“I know,” Jayla replied excitedly, “nine minutes separating me from a new pair of running shoes! Then I can finally say goodbye to Ol’ Reliable,'' Jayla joked.

“I wouldn't call those old just yet. Didn’t you just buy new running shoes for your track meet last month?” Madison recalled. “We spent hours searching for the right pair online!”

Jayla looked down at the pair she was already wearing, similarly purchased only months ago. “Well…those were for motivation…to motivate me to meet my long-distance goal. Look,” she said with a wave of her hand, “this may not be a need, but it’s a want. I’ve worked really hard, and you think so too. I think I deserve to treat myself once in a while!” Jayla justified with another shrug.

Madison paused for a beat, thinking of her next words. She pushed herself away from the desktop computer and scrolled her chair closer to Jayla. “I understand what you mean. I remember wanting to spend all of my paycheck too when I got my first job,” she recalled with a nostalgic grin. “I didn’t though. I was urged to save it, whether it was long-term or even just for a rainy day,” she continued. She paused again, fiddling with her blonde hair in thought. “Let me show you something.”

“Oh no, another life lesson from ‘Mother Madison’,” Jayla teased as she moved to where Madison was fiddling with her purse.

“Hey! I’m only trying to help here!” she responded, feigning offense.

“That’s what you always say!” Jayla pointed out.

“Whatever,” Madison said, playfully rolling her eyes.

Madison took out her phone, making sure their boss didn’t see them. She thumbed through the apps on her phone until she reached an app with an envelope symbol. “This is an app I use to budget all of my spending. It’s powered through my bank, so it’s like super easy to keep everything organized,” she said, showing Jayla the different categories of her budget plan.

Jayla skimmed through them all, making mental notes of the ones she found to be useful. “So, you have money set in place for your groceries and gas and stuff?” Jayla asked.

“Yeah! I have money saved for personal spending and future investments like a house when I graduate and even my retirement…if I can ever get there!” Madison joked, remembering how long her shift had been. “Using an app like this is just an easy way to organize funds and keep an eye on how much you’re spending. I highly recommend it. So, say you just got your pay-check and you want to use every penny. Putting parts of that check into different funds will help you in the long run.”

“Okay, but what about the short run? I want to spend at least some of the money I earned!” Jayla replied, moving back to her own station.

“In the short run…how about a coffee? My treat,” Madison offered, gathering the rest of her belongings.

“Shouldn’t you be saving that extra money?” Jayla countered in jest, ready to clock out for the day.

“Yes, but I budgeted for this type of spending, so I know I have enough to treat the both of us right now,” Madison replied confidently.

Jayla shook her head, grinning. She and Madison left the Barnes and Noble, the afternoon sun shining high.

“So, what do you say?” Madison asked.

“You had me at coffee,” Jayla replied.

(Story created by Jasmine George, Ana Siqueira, Courtney Swanson and Alex Thompson)

related books

These books have a chapter directly related to this topic. Please read them for more details.

Chapter 3: Kiyosaki, Robert. Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! Plata Publishing, 2017.

Chapters 1 & 9: Bach, David. The Automatic Millionaire, Expanded and Updated: A Powerful One-Step Plan to Live and Finish Rich. Crown Publishing Group, 2016.

Principle 8: Siegel, Cary. Why Didn't They Teach Me This in School?: 99 Personal Money Management Principles to Live By . CreateSpace Publishing, 2013.

additional resources

The value of a personal finance class

https://corporatefinanceinstitute.com/resources/knowledge/finance/personal-finance

https://fee.org/articles/what-i-learned-from-a-year-of-obsessively-managing-my-finances

https://mru.org/money-skills

https://www.youtube.com/watch?v=pd29VYF6e-U

https://www.annuity.org/financial-literacy

Micro Habit Stacking: 25 Small Changes to Improve Your Life

OTHER BOOKS

Malkiel, Burton. A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing. W. W. Norton & Company, 2020.

Wood, William. Getting a Grip on Your Money: A Plain & Simple Christian Guide to Managing Personal Finances, Eliminating Debt, Spending, Saving & Giving, Investing for the Future. Intervarsity Press, 2002.

Bach, David. Smart Women Finish Rich, Expanded and Updated. Currency, 2018.

Bogle, John. The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns. Wiley, 2017.

Clason, George. The Richest man in Babylon. Dauphin Publications Inc., 2018.

Hill, Napoleon; Arthur R. Pell. Think and Grow Rich: The Landmark Bestseller Now Revised and Updated for the 21st Century. TarcherPerigee, 2005.

Lynch, Peter; John Rothchild. Beating the street. Simon & Schuster, 1994.

Kobliner, Beth. Get a Financial Life: Personal Finance in Your Twenties and Thirties. Simon & Schuster, 2017.

Orman, Suze. The 9 Steps to Financial Freedom: Practical and Spiritual Steps So You Can Stop Worrying. Currency, 2006.

Bach, David; John David Mann. The Latte Factor: Why You Don't Have to Be Rich to Live Rich. Atria Books, 2019.

Hogan, Chris. Everyday Millionaires: How Ordinary People Built Extraordinary Wealth―and How You Can Too. Ramsey Press, 2019.

IMPORTANT GOVERNMENT SITES

Economy:

Bureau of Economic Analysis reports GDP, Income, International Trade, and many others

Bureau of Labor Statistics reports Unemployment, Prices, Productivity, and many others

The U.S. Department of the Treasury's mission is to maintain a strong economy and create economic and job opportunities

The U.S. Small Business Administration (SBA) continues to help small business owners and entrepreneurs pursue the American dream

Banking:

The Federal Reserve System performs five functions to promote the effective operation of the U.S. economy

The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by Congress to maintain stability and public confidence in the nation's financial system

The National Credit Union Administration is an independent federal agency that insures deposits at federally insured credit unions

Federal Regulation:

The Internal Revenue Service is the nation's tax collection agency and administers the Internal Revenue Code enacted by Congress

The Federal Trade Commission protects consumers and competition by preventing anticompetitive, deceptive, and unfair business practices

The mission of the SEC is to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation

The CFPB is committed to providing consumers with up-to-date information and resources to protect and manage their finances

Other:

Social Security Administration

Department of Education

State of Florida

ECO 3041

ECO 3041 Personal Finance is a 3 credit hour course offered in-person and online each fall and spring semester. The purpose of the course is to provide you with the specific content knowledge of personal finance and to give you opportunities to start using that knowledge to create good habits, make better financial choices, and live a more fulfilling life. It covers material for all 33 topics listed here. See Professor Calhoun's most recent syllabus here. ECO_3041_SP21.pdf

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To schedule a presentation or an appointment with a certified peer mentor to discuss your situation email coss-financialpeermentor@fsu.edu or visit the Stavros Center financial wellness page.