FINANCE MID-TERM REVIEWThe financial planning process: 1. Determine current financial situation2. Develop financial goals3. Identify alternative courses of action4. Evaluate alternatives5. Create and implement your financial action plan6. Review and revise the financial planInfluences on personal financial planning:1. Life situation and personal values2. Consumer prices3. Consumer spending 4. Interest ratesComponents of financial planning1. Obtaining2. Planning3. Saving4. Borrowing5. Spending 6. Managing risk7. Investing Economic forces that influence jobs1. Interest rates2. Inflation3. Consumer demand After-tax= benefits x (1-tax rate) Pre-tax= benefit/ (1-tax rate) Balance sheet (assets = liabilities + net worth)Income statement (revenues or income minus expenses = net income or loss, which either increases or decreases net worth)Cash flow statement (reflects cash flow generated, less cash used for (or from) investments, and cash used for (or from) financing. This statement reconciles beginning and ending cash balancesInsolvency: the inability to pay debt; lack of financial resourcesMoney market fund: a savings investment plan offered by investment companies Money market account: A savings account that requires a minimum balance and has earnings based on market interest rates