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chapter 1
Personal Finance Basics and the Time Value of Money

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16/10/13 1:40 PM

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Learning Objectives

What will this mean for me?

LO1-1 Analyze the process for making personal financial decisions.

Every person has some money. However, the amounts and individual needs and choices are diverse. You now have the opportunity to learn about varied financial paths for avoiding common money mistakes. Your knowledge and actions will move you toward financial security. Despite economic uncertainty, you will be able to use wise financial strategies in every stage of your life to achieve your personal goals.

LO1-2 Assess personal and economic factors that influence personal financial planning.
LO1-3 Develop personal financial goals.
LO1-4 Calculate time value of money situations associated with personal financial decisions. LO1-5 Identify strategies for achieving personal financial goals for different life situations.

my life e HOW DO I START?
One day, you may receive news that your aunt has given you a gift of $10,000. Or you might find yourself with an extensive amount of credit card debt. Or maybe you desire to contribute money to a homeless shelter or a hunger-relief organization.
Each of these situations involves financial decision-making that requires, first, planning and then taking action. The process you use should be carefully considered so no (or only a few) surprises occur. The main focus when making decisions is to avoid financial difficulties and legal troubles. How will you best plan for using your finances? For each of the following statements, select “yes,” “no,” or “uncertain” to indicate your personal response regarding these financial planning activities.
1. When making major financial decisions, I research them using a variety of