BECO001 - Diploma of Business Economics for Business

Personal financing planning

A personal financial plan is a written examination of your finance, including your income, your liabilities, asset evaluation, and your investments to determine both your future financial state and current financial state …  

Here are several examples of goals that you may want to focus on in your personal financial plan:

  •         paying off your student loans;
  •         down payment on a house saving
  •       learning a new skill by taking a series of training courses. 
  •         paying off debt through surgery, etc.

Areas of Financial Planning

There are 7 areas of financial planning;

  •         Taxes and budgeting
  •          Ready access to cash. and managing liquidity.
  •         Financing large purchases.
  •         Managing your risk
  •         Investing your money.
  •          Communication and record-keeping

Benefits of financial planning

There are several benefits of financial planning which helps you to;

  • Increase your savings

Maybe it is possible to save money without having a financial plan, but this is not the most efficient way to go about it. While you create the financial plan, you get a good deal of insight into your expenses and income. You can consciously cut down and track your cost. This process will automatically increase your savings in the long term. 

  •        Enjoy a better standard of living

 Most of the people assume that they would have to sacrifice their living standards because their EMI payments and monthly bills are to be addressed. On the opposite, with a financial plan, you don’t have to worry about your lifestyle. 

  •    Be prepared for emergencies

Creating a fund for emergencies is the most important part of financial planning. You have to examine that you have a fund that is equal to 6 months of your monthly salary. This will help you to don’t worry about the fund in case of any family emergency or a job loss. The emergency fund will help you to pay for various expenses on time.   

  •       Attain peace of mind

 With enough funds in your hand, without worry, you can cover your monthly expenses, for your future goals, and a little part for your family and yourself. Financial planning helps you to save money efficiently and enjoy peace of mind. Don’t worry if you have not reached this stage. If you are on the path of financial planning, then the destination of financial peace is not very far away.

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