The following are steps in creating a financial plan.

1. Calculating net worth.

 Net worth is the amount by which assets exceed
liabilities. In so doing, consider (1) assets that entail
one’s cash property, invest, savings, jewelry and
wealth; and (2) liabilities that include credit card debt,
loans and mortgage. formula;: total assets-minus total
liabilities = current net worth.
2. Determine cash flow.
 A financial plan is knowing where money goes every
month. Documenting it will help see how much is
needed every moth for necessities, and the amount for
savings and investment.
3. Considering the priorities.
 The core of the financial plan is the person’s and
casualty clearly defined goals that may include: (1)
Retirement strategy for accumulating retirement income
(2) Comprehensive risk management plan including a
review of life and disability insurance, personal, liability
coverage; property and casualty coverage
(2) Comprehensive risk management plan
including a review of life and disability insurance,
personal, liability coverage; property and casualty
coverage, and catastrophic coverage; (3) Long-
term investment plan based on specific investment
objectives and a personal risk tolerance profile;
and (4) Tax reduction strategy for minimizing taxes
on personal income allowed by tax code.

Five Financial Improvement Strategies

Financial literacy shapes the way people view
and handle money. The following are financial
improvement suggested by Investopedia as a
journey to financial literacy.

1. Identify your starting point.

calculating the net worth is the best way to
determine both current financial status and
progress over time to avoid financial trouble to
much on /wants and nothing enough for the needs.
2. Set your Priorities.
Making a list of rated needs ans wants can
help set financial priorities. Needs are things one
most have in order to survive ( i.o. food, shelter,
clothing, health care and transportation); while
wants are things one would like to have but are not
necessary for survival.
3. Document your spending.
One of the best ways to figure out cash flow or
what comes in and what goes out is to create with
a budget of a personal spending plan. A budget
lists down all income expenses to help meet
financial obligations.
4. Lay down your dept.
Living with dept is costly not just because of
interest and fees, but it can also prevent people
from getting ahead from getting ahead with their
financial goals.
5. Secure your financial future.
Retirement is an uncontrollable stage in a worker's
life, of which counterpart are losing the job, suffering
from an illness or injury, or be forced to care for a loved
one that may lead to an unplanned retirement.
Therefore, knowing more about retirement options is an
essential part of securing financial future.

Financial Goal Planning and Setting

Setting goals is a very important part of life,

especially in financial planning. Before investing the
money, consider setting personal financial goals.
Financial goals are targets, usually driven by specific
future financial needs, such as saving for a comfortable
retirement, sending children to college, or enabling a
home purchase. .
There are three key areas in setting investment
goals for consideration.

A.Time horizon.
 It indicates the time when the money will be
needed. To note, the longer the time horizon, the
more risky (and potentially more lucrative)
investments can be made.

B. Risk tolerance.
 Investors may let go of the possibility of a large
gain if they knew there was also a possibility of a
large loss (they are called risk averse); while
others are more willing to take the chance of a
large loss if there were also a possibility of a large
gain (they are called risk seekers). The time
horizon can affect risk tolerance.
C. Liquidity needs.
 Liquidity refers to how quickly an investment can
be converted into cash (or the equivalent of
cash). The liquidity needs usually affect the type
of chosen investment to meet the goals.

D. Investment goals: Growth, income and

stability.
 Once determined the financial goals and how
time horizon, risk tolerance, and liquidity needs
affect them, it is time to think about how
investments may help achieve those goals.
When considering any investment, think about
what it offers in terms of three key investment
goals: (1) Growth (also known as capital
appreciation) is an increase in the value of an
investment; (2) Income, of which some
investments make periodic payments of interest
or dividends that represent investment income
and can be spent or reinvested; and (3) Stability,
or known as capital preservation or protection of
principal
An investment that focuses on stability concentrates
less on increasing the value of investment and more
on trying to ensure that it never loses value and can
be taken when (
https://www.flexscore.com/learningcenter/setting-fina
ncial-and
needed investment - goals ) .

Budget and Budgeting

A budget is an estimation of revenue and
expenses over a specified future period of time and is
usually compiled and re evaluated on a periodic basis
. Budgets can be made for a variety of individual or
business needs or just about anything else that
makes and spends money . Budgeting , on the other
hand , is the process of creating a plan to spend
money . Creating this spending plan allows one to
determine in advance whether he / she will have
enough money to do the things he / she needs or
likes to do . Thus , budgeting ensures to have
enough money for the things needed and those
important ones and will keep one out of debt .
Seven Steps to Good Budgeting

The following are seven steps that may help in

attaining good budgeting .

Step 1 : Set realistic goals . Goals for the money

will help make smart spending choices upon
deciding on what is important .

Step 2 : Identify income and expenses . Upon

knowing how much is earned each month and
where it all goes , start tracking the expenses by
recording every single cent .

Step 3 : Separate needs from wants . Set clear

priorities and the decisions become easier to make
by identifying wisely those that are really needed or
just wanted .
Step 4 : Design your budget . Make sure to avoid
spending more than what is earned . Balance budget
to accommodate everything needed to be paid for .

Step 5 : Put your plan into action . Match spending

with income time . Decide ahead of time what you will
use each payday . Non - reliance to credit for the living
expenses will protect one from debt .

Step 6 : Plan for seasonal expenses . Set money

aside to pay for unplanned expenses so to avoid going
into debt .

Step 7 : Look ahead . Having a stable budget can

take a month or two so , ask for help if things are not
getting well .
:Spending
If budget goals serve as a financial! wish
list , a spending plan is a way to make those
wishes a reality . Turn them into an action
plan . The following are practical strategies in
setting and prioritizing budget goals and
spending plan:

1. Start by listing your goals .

 Setting budget goals requires forecasting
and discussing future needs and dreams
with the family .
2. Divide your goals according to how long it
will take to meet each goal
 Classify your budget goals into three categories
: short - term goals ( less than a year ) , medium
- term goals ( one to five years ) , and long -
term goals ( more than five years ) . Short -
term goals are usually the immediate needs and
wants ; medium term goals are things that you
and your family want to achieve during the next
five years ; and long - term goals extend well
into the future , such as planning for retirement .
3. Estimate the cost of each goal and find out
how much it costs .
 Before assigning priority to goals , it is
important to determine the cost of each goal .
The greater the cost of a goal , the more
alternative goals must be sacrificed in order to
achieve it .

4. Project future cost .

 For short - term goals , inflation is not a big
factor , but for medium and long - term goals ,
it is a big factor . To calculate the future cost
of the goals , there is a need to determine the
rate of inflation applied to each particular
goal .
5. Calculate how much you need to set aside
each period .
 Upon knowing the future cost of the goals , next is
to determine how much to put aside each period
to meet all the goals . 6. Prioritize your goals .
Upon listing down all the goals and the estimated
amount needed for each goal , prioritize them .
This serves as guide in decision - making .

7. Create a schedule for meeting your goals .

 It is important to lay down all the goals according
to priority with the corresponding amount of
money needed , the time it will be needed , and
the installments needed to meet the goals . (
https://www.flexscore.com/learningcenter/the-spe
nding-plan-setting-and
prioritizing - your - budget - goals )
Investment and Investing
As teachers , when you have saved more
money than what you expect at a time of need ,
consider investing this money to earn more interest
than what your savings account is paying you .
There are many ways you can invest your money
but consider four aspects :

1. How long will you invest the money ? ( Time

Horizon )
2. How much money do you expect your
investment to ear each year ? ( Expectation of
Return )
3. How much of your investment are you willing to
lose in the short - term in order to earn more in
the long - term ? ( Risk Tolerance )
4. What types of investment interest you ?
( Investment Type )
Savings
In order to get out of debt , it is important to set
some money aside and put it into a savings
account on a regular basis . Savings will also help
in buying things that are needed or wanted without
borrowing .

Emergency Savings Fund . Start as early ,

setting aside a little money for emergency savings
fund . If you receive a bonus from work , an income
tax refund or earnings from additional or side jobs ,
use them as an emergency fund .

10 Reasons Why Save Money

With credit so easy to get , here are ten
practical reasons why it is important to save money
that everyone , including teachers , must know .
1. To become financially independent .
 Financial independence is not having to depend
on receiving a certain pay but setting aside an
amount to have savings that can be relied on

2. To save on everything you buy .

 With savings , you can buy things when they are
on sale and can make better spending choices
without being compromised on credit card
interest charges .

3. To buy a home or a car .

 Savings can be used in buying a home in full or
down payment , especially in times of promo
deals , bids and inevitable sale and at a
reasonable interest rate .

4. To prepare for the future .

 Through savings , you can be confident to face
the future without worrying on how you will
survive .
5. To get out of debt .
 If you want to get out of debt , you have to save
money .

6. To augment annual expenses .

 In order to attain a good , stress - free financial
life , there is a need to save for annual expenses
in advance .

7. To settle unforeseen expenses .

 Savings can respond to unforeseen expenses in
times of need .

8. To respond to emergencies .
 Emergencies may happen anytime and these
can be expensive so , there is a need to get
prepared rather than potentially become another
victim of an emergency .
9. To mitigate losing your job or getting hurt .
 Bad things can happen to anyone , such as
losing a job , business bankruptcy or crisis ,
being injured or becoming too sick to work .
Therefore , having savings is the key to resolve
such a dilemma .

10. To have a good life .

 Putting aside some money to spend when
needed can bring about quality and worry - free
life at all times .
Common Financial Scams to Avoid
Financial fraud can happen to anyone,
including the teachers at any time. While some
forms of financial fraud, such as massive data
breaches, are out of one's control, there are many
ways to proactively get rid of financial scams and
identity theft.
Here are some of the most common financial
scams, along with ways to identify them early and
how to protect one's self from being victimized.

A. Phishing. Using this common tactic, scammers

send an email that appears to come from a
financial institution, such as a bank and asks you
to click on a link to update your account
information. If you receive any correspondence
that asks for your information, never click on the
links or provide account details. Instead, visit the
company's website, find official contact
information, and call them to verify the request.
B. Social Media Scams. Scammers are adept at
using social media to gather information about the
traveling habits of potential victims. They also have
phishing tactics, including posts seeking charity
donations with bogus links that allow them to keep
your money. Therefore, be conscious of the
information you post online, especially personal
details and plans for a vacation that you would
leave your house unoccupied.

C. Phone Scams. Another prevalent tactic is

scamming phone calls. The scammers pose as a
government agency, such as the Bureau of internal
Revenue or local law enforcement agencies, and
use scare tactics to acquire your personal
information and account numbers. Never provide
your account information over the phone. Look for
the agency's contact information, and call them to
verify any request. To note, government agencies
will never text or call you to ask for money.
D. Stolen Credit Card Numbers. There are
numerous ways that scammers can obtain your credit
card information, including hacking. phishing, and the
use of skimming devices, such as small card readers
attached to unmanned credit card readers (.e. ATMs,
gas pumps, and more). These small devices pull data
from your card when you swipe it. Before you use an
ATM or swipe your card, look for suspicious devices
that may be attached to the card reader.

E. Identity Theft. Depending on the amount of

information a scammer is able to obtain, identity theft
may extend beyond unauthorized charges on a debit
or credit card. If scammers are able to obtain your
Social Security number, date of birth, and other
personal information, they may be able to open new
accounts in your name without your knowledge. Be
aware of an information you share and with whom,
and always shred sensitive information before
disposing it.
By taking preventative measures and being aware of
scams, you can minimize the risks of fraud.
Monitoring your online or mobile banking accounts
daily can also help you see fraudulent charges
quickly.(
https://www.regions.com/linsights/Personel/Financial-
Hardship/Disaster-
recovery/common-financial-scams-to-avoid)

10 Tips to Avoid Common Financial Scams

Every year, fraud cases are getting worse, leaving
countless victims in trouble and danger through data
breaches, identity theft and online scams.
Unfortunately, new and improved technology only
gives fraudsters an edge, making it easier than ever
for scam artists to nab financial data from
unsuspecting consumers (Bell, 2019).

1. Never wire money to a stranger. Although it is

one of the oldest Internet scams, there are still
consumers who fall for this rip-off or some variations
of it.
2. Don't give out financial information. Never
reveal sensitive personal financial information to a
person or business you don't know, thru phone, text
or email.

3. Never click on hyperlinks in emails. If you

receive an email from a stranger or company asking
you to click on a hyperlink or open an attachment
and then, enter your financial information, delete the
email immediately.

4. Use difficult passwords. Hackers can easily find

passwords that are simple number combinations.
Create passwords that are at least eight characters
long and that include some lower and upper case
letters, numbers and special characters. You should
also use a different password for every website you
visit.
5. Never give your social security number. if
you receive an email or visit a website that asks for
your Social Security number, ignore it.

6. Install Antivirus and Spyware protection.

Protect the sensitive information stored on your
computer by installing antivirus, firewall and
spyware protection. Once you install the program,
turn on the auto-updating feature to make sure the
software is always up-to-date.

7. Don't shop with unfamiliar online retailers.

When it comes to online shopping, only do
business with familiar companies. When
purchasing a product from an unfamiliar retailer, do
some research to ensure the business is legit and
reputable.
8. Don't download software from pop-up
windows. When you are online, do not trust pop-up
windows that appear and claim your computer is
unsafe. If you click on the link in the pop-up to start
the "system scan" or some other programs,
malicious software known as "malware" could
damage your operating system.