In the “Build Your Proficiency” Diagnostic, I achieved the least score in the factors that
impact the financial planning decision and individual characteristics. Right now, I can say
that I face numerous challenges to comprehend the exact elements that affect my financial
planning process. One of the main reasons for this was that I did not have any major
responsibilities to manage finance. But I sincerely plan to pay more attention to how I spend
the money that is available with me. An economic approach will help me to spend the
money wisely and make careful financial planning decisions that will help me in the long
run.
This week I have understood that financial concepts such as opportunity cost, compound
interest, and the time value of money can help to achieve the financial goals in a better way.
Opportunity cost is the activity that I miss so that I can do something else. Compound
interest refers to the interest over and above interest. Ultimately, the time value of money
shows that the money available today is more valuable than the same amount in the future.
All these financial concepts can be adopted to carefully manage finance and take important
financial decisions. For chapter one, I felt like this information was pretty basic when I first
glanced over the chapter. I did the proficiency diagnostic before I read the chapter to see
how I would score, and I surprised myself by not knowing as much as I thought I did.
According to the diagnostic, I need to read 1.2, 1.3 and 1.4 however my score was 80% for
chapter 1.
For chapter two, I scored much, much, lower. I only scored a 55%. I need to review 2.1, 2.2,
and 2.3 but mostly 2.4 as this is where I only got one question right out of this series of
questions.I have learned this week that opportunity cost is the actual thing you are giving up,
not a type of decision you are making. IE, you are not making an opportunity cost decision,
the opportunity cost is the social gathering I gave up tonight to post to blackboard on time.
With the Build Your Proficiency Diagnostics I scored my lowest in personal financial and
time managing money. I learned this week about opportunity cost, compound interest, and
time value of money all helped me realize the impact that each has and that it can be a win
or lose situation, but it all about how well you manage your money. I think this course it's
going to help me out a lot when it comes to balancing and budgeting my spending. The
information learned in both chapters has given me some great points and better
understanding on how to better plan my financial plans for the present and future. The two
study objectives that I received the lowest score for:
-Describing how individual characteristics economic factors influence personal financial
planning
-Explain how compound interest benefits investors
These both have an impact on my financial planning in a positive light. With going back and
re-reading the material it has helped me to better understand my personality financially as
well gain a better understanding of compound interest.
I learned a great deal this week than I’d known about financial planning. I’ve learned that
opportunity cost in short is what we give up in order to take a particular action for example:
spending time and money going shopping for new clothes going to the mall. Which in turn
would not allow me to stay home and read a book and I can’t spend the money on something
else. Compound interest, I did find some what complex, but I have learned that it is earned
on money such as a savings account. Time value of money has taught me that money
received today can be worth more if managed properly.The information learned in both
chapters has taught me a great deal and made me more confident in revising my current
financial plan. It has made me more knowledgeable and better prepared. I agree that we
more than likely postpone this type of planning because were, busy, it's a lot of resources,
and requires some math. If you've been out of school for a while like myself, you will put
this on the back burner. Even though this lesson had a lot of information, it was very helpful,
and informative, and has helped guide me through my financial, and retirement planning.As
it relates to time value, compound interest, and opportunity cost, these resources, or
components help me realize that I would be losing instead of gaining if I were to borrow, or
access any of my savings, or retirement investments. This lesson was so enlightening that I
had to share with my family, so that we can all begin the necessary steps toward not only
financial planning , but financial security as well. This lesson taught goals, smart goals, net
worth, value, and many other components to assist on my personal financial journey. It was
well worth the read. In "Build Your Proficiency" in chapter one the two topics that had the
lowest score will impact my future financial goals because I would not be able to make the
correct decision that would help me financially long-term. I feel that would not impact me
because I want to build and save instead of spending. In chapter two the two topics that
would have an impact on my future goals is that I would not be able to balance and figure
out or balance my future funds. If I continue to practice on studying the present values of
money I will become better at it and it will help me with my future finances. This week I
learned that in opportunity cost I will learned that what I am saving for my future can not be
spent at any given time. time value of money will help me save money and learn how to
invest it over time. Compounding will help me grow interest on my money for my future
financial goals that I'm trying to achieve. The " Build your Proficiency Diagnostic's " that I
scored the lowest on was the personal financial planning process and the personal financial
statements and the time value of money. The financial planning process can impact my
future by creating stress, financial difficulties or even marital issues. By not know how to
use financial statements my future can also suffer. I have never been one to do well when it
comes to money and it is my belief that my lack of the knowledge when it comes to
financial planning and time value and financial statements has impacted my health, wealth
and relationships with others.I have learned that opportunity cost is what I give up to take
action. I learned that the value of money now is greater that the same money in the future. I
learned that compounding interest, is interest on top of interest. I have learned a lot about
money this week and think this class will be life changing for me and my family. I have
struggled most of my life with how to get my finances in order and I think I will enjoy
learning more about money management. In the "Build Your Proficiency" Diagnostic, I
scored lowest on factors that influence financial planning decisions (1.2) and calculating the
present value of funds to be received or paid in the future (2.4). As of right now, I know I
can say that I struggle with determining what influences my financial planning decisions due
to the fact that I do not have many responsibilities currently. However, I would like to move
out on my own soon, so I have started to pay more attention to how I am spending my
money.I felt that I had a good refresher course this week. I have taken AP Economics 3
years ago in high school. Even though that class was considered to be similar to a college
level course, I felt that what I learned this week was more in depth. I am glad to know that I
remember what opportunity cost are. After AP I was left with a bit of confusion concerning
compound interest, but now I understand how helpful it could be when you are saving
money. After I saved up enough for what I needed to get that money was pulled out of my
account. Now I would to have a savings account that is a "hands off account" to allow my
savings to grow. The two lowest scores I received was in individual characteristics and
economic factors and personal cash flow statements. Knowing how having two kids and
being a single mother is going to affect my finance goals are important. I must be aware of
how the cost of raising two kids will affect my income and savings. I must measure their
expenses to my fixed income, and how much I will be able to put into my retirement. Being
able to maintain a better cash flow statement will help with that. I know my fixed expenses
well, but I do not track my variable expenses as I should. Tracking those variable expenses
will allow me to have a better idea of how much I am actually saving.I learned a lot about
opportunity cost, I sometimes do spur of the moment things which is time and money I can’t
get back or use for other things. I will get buyer’s remorse or wish I had used my time and
money for other things. I need to practice more critical thinking when it comes to my time
and spending habits. Understanding that leaving my money in savings and accruing the
interest will benefit me more than taking the money out. Earning interest on my interest is
not something I had ever thought about.
