The school

Classified in Economy

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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

STEPS FOR FORMAL FINANCIAL PLAN

  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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