Personal financial planning
Financial planning, as words, means something about finance or personal finance. In everyday life, people always talk about handling or managing money for future needs. Every person who is earning a billion or thousand needs to manage money on their part. It depends on person to person how they invest, save, and spend. Now move to from where we have to start. Here are some processes and steps to follow. First, we start with the process.
In personal financial planning, every family and individual needs and wants are different. In personal finance, we estimate somebody needs a home, a car, higher education, and plans for their retirement. Some people benefit from every penny which they earn by hard work. Each family has a different goal to achieve.
A comprehensive financial plan is that which enhances the quality of life, increases satisfaction and reduces the risk of uncertain conditions.
Here are some advantages of personal finance planning.
1) Financial planning increases the effectiveness of using money to protect financial resources for a lifetime.
2) It controls financial resources, avoiding excess debt.
3) It gives freedom from financial worries and anticipated expenses.
Financial goal
To effectively use a finance plan, determine the goal to achieve. Here, explain the type of financial goal. Here are two types of goal
-> First the time
-> Need for finance
1) Timing of goal-Timing of a goal means the time to achieve the thing. Some goals are a month to a year, which are short-term goals, like paying for small debt and planning for a vacation. Long-term goal plan for 5-10 years like education, owing home.
2)Need for finance- If somebody obtaining training pays for insurance premiums for consumer products such as food, clothing, and entrainment, all these happen periodically.
Factor influence personal financial planning
Three main factors influence financial planning
-> Life situation
-> Personal values
-> Economic factor
1) Life situation- Life situation means changes in adult life. As society changed, different types of financial needs are involved, today in a family two people earn money, people get married at a late age, the adult life cycle has many stag stages that influence your financial activities and decisions, and life situation is affected by such as
-Graduation
-Engagement
->The birth or adoption of a child
->A Career change
-> Change in health
->Retirement
2) Family situation defines you as value also defines you, value alfinesyou, and value has a direct influence on such decisions as spending versus saving for the future.
2) Economic factor-> Economic factors influence financial planning supply and demand forces. Economic factors include various institutions, principally labor, and government, that must work together to satisfy our needs and wants.
a)Market forces
b) Global finance