Financial Planning

Financial Planning
Applying financial principles to household decision making, stressing integration between areas. Income tax and estate planning, retirement, investments, portfolio management, and risk management.
 Hours3.0 Credit, 3.0 Lecture, 0.0 Lab
 PrerequisitesBUS M 201; or FIN 201; Any business major status.
 TaughtFall, Winter
 OfferedIndependent Study also.
 ProgramsContaining FIN 418
Course Outcomes

1. Students develop and use a framework for financial planning

In this class we develop a framework to help students not only make wise financial decisions and maintain control of their finances, but also give them a framework as they teach others. It's not what they earn, but what they save after taxes and inflation that makes them wealthy. This framework examines important areas that affect household wealth such as:

  1. Measuring financial health
  2. Informed budgeting and debt reduction strategies
  3. Income tax planning
  4. Managing consumer credit
  5. Acquisition of big-ticket items (home, automobiles, and education)
  6. Insurance and risk management
  7. Investment planning, strategies and asset allocation (stocks, bonds, annuities, and mutual funds)
  8. Retirement planning, and
  9. Estate planning.

2. Students then use this Framework to create their own Personal Financial Plan (PFP)

Students use this knowledge and information to create their own Personal Financial Plans. Their Personal Financial Plan is their financial roadmap for life. The better and more thoughtful their Financial Plan and the more willing they are to follow it, the more likely they will be to achieve their personal and financial goals once they leave this class. This Plan, if done carefully and thoughtfully, will likely be one of the most important projects they will complete here at BYU. It includes 16 of the most critical financial areas and decision points of their life and career.

3. Students calculate and interpret key metrics for their finances

Students calculate specific liquidity, debt, and savings ratios in the process of analyzing their own lives, spending, and vision, goals and plans. These use these ratios as they come to understand where they are compared to where they want and should be. Finally, students hand in their budgets, financial statements, and financial ratios at the end of each semester and discuss where they are, where they want to be, and how they will get there.

4. Students learn the risks of not planning life well

In the process of creating their Personal Financial Plans, students develop a vision of where they want to be, set goals to keep them focused on their vision, develop short-, intermediate-, and long-term tactical plans to get them from where they are now to their goals, determine their constraints which will keep them from their goals, and then develop a communcation plan on who they will share these plans to achieve their vision.

Students will learn the skills to help them not fall for the risks of going into debt, buying too big a home, buying too expensive of car, not living on a budget, not saving for retirement and other long-term goals, not investing wisely, and not taking responsibility for their personal and other choices.