Financial Planning

Financial PlanningA tool used to achieve financial success based upon the development and implementation of financial goals.

On going process for life

What things should people take into

consideration when creating a financial

plan?

Consider These: Values

Goals

Lifestyle

What are some advantages to a spending plan?

Pros Helping you meet financial goals Giving you a strong sense of where

your money is going Allowing for income and expenditure

tracking

Tips on creating a planA well written financial goal needs

to be measurable. If expenses exceed the spending

plan then decrease your expensesEmergencies happen – be

prepared with 3-6 months of income in savings

According to the Consumer Expenditure

Survey, what expenditure is the largest portion of

one’s income on average? What is the second and

third?

#1 Housing

#2 Transportation

#3 Food

Saving

Saving versus Investing Saving: income not spent on current consumption Investing: spending intended to gain by adding to

the assets, not available for immediate withdrawalSaving

A person should save 10 to 15% of gross income? Why should individuals save 3 to 6 months income

for emergencies

Vocabulary Compound Interest – interest earned on

both interest and principal Insurance – an arrangement between an

individual and an insurance company to protect the individual against risk.

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