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Financial plan(planning)- process of managing your money to achieve personal economic satisfaction

Financial plan incorporates:

1.Formalized report-follows proper procedures, orderly,endorsed

2. Summarizes current financial situation-Now the way it is

3.Analyze financial needs- need to purchase for ?

4. Recommends future financial activities

5.Measure progress toward financial goals

Advantages of financial plan-

  1. Increases effectiveness in obtaining and using your financial resources-aids in credit, obtain capital,collateral

  2. increased control of your finances

  3. improved personal relationships

  4. freedom from financial worries

Financial life cycle has 3 phases:

  1. Borrowing phase - school, home, family, purchase items

  2. Accumulation phase- savings, investments, getting paycheck, pay-off, pay off borrowing phase

  3. spending phase- no more earned income, retirement

Budget is: accounts for day to day spending- must be well planned, bette for unexpected occurrences, must be realistic, flexible, may need to shift funds, clearly communicated, prioritize necessities


  1. Determine financial condition

  2. Develop financial goals→ time frames

  3. Develop courses of action-compare between different options, compare at risk and return, decide continue or change course

  4. Create and implement financial action

  5. Review and revise as needed

  6. semi-annually, annually, life changing event

POD- payable on death-designated beneficiary to receive all of (clients) assets. Keeps you out of probate court. Supersedes last will and testament.

TOD- transferable on death, beneficiaries receive assets ot time of person’s passing w/o going to probate investments

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