Quiz 1: Understanding the Financial Planning Process

Business

A financial planning is a dynamic process and by implementing this we can change our needs and financial goals. Financial goals are the goals (or) results that an individual wants to attain. For example: buying of a home, constructing a building and achieving a financial independence. Personal financial planning will consider the individual financial goals. Using personal financial planning tools will help in organizing the finances properly. It would help in evaluating their present financial conditions and make efforts to change the present state to a desired state of finance. We can make changes in: • Expenditure in household items and groceries: We can reduce (or) minimize the amount spent for household purchases and groceries. First we have to identify whichever item is really want (or) need and how much benefit we can get from that item. Therefore, it is clearly says that a small change in household expenditures and groceries, we can plan our personal financial needs. • Investment patterns: Based on the financial needs and financial goals we can change our investment patterns. • Increase savings by proper financial planning: We can increase our savings by proper financial planning. Many investors will use some financial tools and plan their financial needs and also increase their savings by implementing proper financial plans.

Personal Financial goals: Name James Fredrick Date 18 th July 2014 Short Term Goals (1 year or less) img Short-term goals: These are the financial goals set for 12 month period (or) 1 year only. The short-term goals are the key inputs for cash budgets and income and expenditures. Intermediate Goals (2 + 5 yrs) img Intermediate goals: The Intermediate goals bridge the gap between short and long-term goals. Long term Goals (6 + yrs) img Long-term goals: These are the financial goals set for more than a year. These are very difficult to expect (or) pinpoint exactly because of long duration. A financial planning is a dynamic process and by implementing this we can change our needs and financial goals. Financial goals are the goals (or) results that an individual wants to attain. For example: buying of a home, constructing a building and achieving a financial independence. Personal financial planning will consider the individual financial goals. The changes in our goals are due to the financial planning. A financial plan is a map to achieve the goals. The different stages of our life cycle will change our financial needs and goals. Therefore, when we are aware about the cost and the time frame, we would automatically plan ourselves in such a way so that we can get the desired result.

Financial goals are the goals (or) results that an individual wants to attain. For example: buying of a home, construction of a building and achieving a financial independence. Personal financial planning will consider all the individual financial goals. The financial goals and related activities of: (a) • Pay off the loans from all students within 3 years. • Save $1,000 for two years to purchase a bike. • Save money for rent 1 year to purchase laptop. (b) • Pay off all the loans before the MBA degree. • Look for a feasible education loan for daily MBA • Shift to a cheaper place to stay so as to save money. (c) • Begin to save for college for the children. • Plan out insurance schemes • Plan to save for a house. (d) • Plan for the college of the child • Save to keep a maid to look after the father. • Investing in avenues to get better returns.