CFEI® / CPA Practical Guide to Personal Financial Awareness

What Every High-School Graduate Should Know About Money
1. Auflage 2024
ISBN: 979-8-3509-3207-2
Verlag: BookBaby
Format: EPUB
Kopierschutz: Adobe DRM (»Systemvoraussetzungen)

E-Book, Englisch, 430 Seiten

Reihe: Practical Guide to Personal Financial Awareness

This book is a down-to-earth guide for managing your finances that provides a mindful and holistic approach to personal money matters. Financial content is presented that is appropriate for high school through retirement. The book is also a personal story documenting one man's journey to financial awareness and the trials and tribulations along the way. Having successfully navigated the rough and often murky waters of personal finance, Lorenz provides many real-world examples combined with life lessons learned. This book is an overview of personal finance concepts that can help the average person deal more effectively with money situations in their lives, whether it's buying a car or home, investing for retirement, paying for college, or improving their credit score. The book is packed with relevant and interesting anecdotes describing financial situations that many have been or will go through. These are interspersed with important financial concepts and useful tips, delivered in an easy-to-read conversational style.

Autoren/Hrsg.

CFEI®,

CPA,

Leseproben

Chapter 1 Financial Literacy Perspectives Chapter Overview: This chapter introduces the concept of financial literacy and provides an overview of the main subject areas addressed by the field of personal finance education. It emphasizes how the lack thereof can impact your life and promotes the offering of personal finance courses in high school. Examples of financial literacy initiatives at the state and national levels are identified. The chapter provides a backdrop based on some of my own personal financial experiences. It describes the use of the “Offsite Meeting” for families becoming more financially aware. The “Personal Financial Spreadsheet (PFS)” is described, along with its use as a guide when reviewing your current finances and financial goals. The chapter also describes some of the more common personal finance problems that can result from being finically illiterate. It introduces mindful awareness and its importance in financial affairs as well as other life areas. The chapter is divided into three parts: Part 1: Financial Literacy Overview Part 2: Financial Literacy Problems Part 3: Financial Literacy Solutions A short quiz is provided to help you determine your current knowledge of personal finance concepts. Refer to Exercise 1-1 below and take the financial knowledge quiz to get started and see how you fare. Chapter PFS Integration: This chapter introduces the “Personal Financial Spreadsheet” (PFS), which is the foundation of the book and can be used as a centralized reference repository for your financial information. Chapter 2 provides an overview and describes the function and structure of the PFS and sheets that it includes. Appendix A contains screenshots of the seven sheets (tabs) of the PFS with sample data entered. Chapter Exercise: Exercise 1-1: General Financial Knowledge Quiz There are many financial tests available on the Internet that can help you gauge your current financial awareness level. Before you start reading this book, take the basic sixteen-question test from the American Association of Retired People (AARP). It provides a good selection of personal finance questions that can help you evaluate your current level of financial knowledge. The topics and content of the quiz are relevant and current. If you get them all correct, you have a good foundation to build on. Take the quiz again after reading this book and compare your before and after scores. Note: As you take the quiz, read the explanation of the answer to gain additional knowledge irrespective of whether you get the correct answer to a question. The answers to these quiz questions, and much more, are found within the pages of this book. The link to the AARP “Test Your Money Smarts” financial literacy test is provided here. You may need to turn off your ad blocker to view the quiz. If you have difficulty accessing the quiz, do a search for “financial knowledge quiz” and you will find several from reputable sources. https://www.aarp.org/money/budgeting-saving/info-01-2014/test-your-money-smarts.html Chapter Notable Quotes: Quote 1-1: “Awareness is the greatest agent for change.” - Eckhart Tolle Quote 1-2: “Life is hard. It’s even harder if you are ignorant.” - John Wayne Quote 1-3: “Give a person a fish, feed them for a day. Teach them to fish, feed them for a lifetime.” - Lao Tzu Quote 1-4: “Learn from the past, plan for the future and live in the present.” - Anonymous Quote 1-5: “It is a great and powerful feeling to pay off your credit cards on your way to being debt free.” - Anonymous Quote 1-6: “Life is 10% what happens to you and 90% how you react to it.” - John Maxwell Part 1: Financial Literacy Overview What is Financial Literacy? There are many variations for the definition of “Financial Literacy.” Wikipedia provides a concise and accurate financial literacy definition as follows: “The possession of the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources.” Over the last twenty years or so, we have seen a heightened awareness with regard to financial literacy or more appropriately financial “illiteracy.” Many initiatives have been developed surrounding this important topic. The following are contributing factors to the problem: Lack of basic personal finance education Increased complexity of personal finance More savings and investment options available Increasing number of financial scams It’s no wonder the average person gets confused and has difficulty when it comes to making financial decisions. Fortunately, we have also seen an increased willingness and ability by various organizations to teach financial literacy content to deal with this serious problem. Comprehensive and well-funded efforts toward imparting financial literacy have sprouted from private companies and professional organizations in addition to the government-driven efforts—at both the national as well as state level—aiming at the same. This section just highlights a few of the initiatives and efforts that are currently underway and their approach to addressing financial literacy. Financial Literacy Initiatives The following organizations have launched financial literacy initiatives, developed standards and model curricula, and implemented local and nationwide financial literacy programs. The organization, the initiative, and the Website are listed here for more information on what each organization is doing. This is a sampling of organizations and their financial education offerings. Regarding state initiatives, nearly every state in the U.S. has initiated and/or implemented standards and programs to provide guidance to school districts and instructors. American Institute of Certified Public Accountants (AICPA) 360 Degrees of Financial Literacy. Visit the AICPA Website at: https://www.aicpa-cima.com/home/ or the 360 Program Website: https://www.360financialliteracy.org/ Ohio Department of Education (ODE): Learning Standards for Financial Literacy for grades K-12. https://education.ohio.gov/Topics/Learning-in-Ohio/Financial-Literacy/Financial-Literacy-in-High-School Note: Many other states have or are developing similar programs and requirements. U.S. Department of the Treasury - Financial Literacy and Education Commission (FLEC) National financial education Website (MyMoney.gov) and a national strategy on financial education. https://www.mymoney.gov Council for Economic Education (CEE) and Jump$tart National Standards for Personal Financial Education https://www.councilforeconed.org/new-national-standards-for-personal-financial-education National Financial Educators Council (NFEC) Certified financial education instructor training, standards and course materials. https://www.financialeducatorscouncil.org Financial Literacy Subject Areas The word “literacy” simply means the ability to read and write a language. By any measure the world of finance has its own, often cryptic, language and a high percentage of the U.S. population is financially illiterate. The average citizen has never taken a personal finance course in any educational setting. This results in considerable pain and suffering, much of which is avoidable with some basic personal finance education. The lack of education and the fact that each person has preconceived ideas and attitudes toward money can make financial education especially challenging. Based on subject areas identified in the financial literacy education initiatives listed previously, the following is a distillation of the common subject areas for an audience aged eighteen and older. Financial literacy education offerings will cover some or all of these topics to...