Meaning of personal financial planning. A proper meaning of the phrase separately and there common meaning needs to be understood carefully. Personal means somebodys owned thing or a personal affair. Financial means the position of a person or a company in monetary terms. Planning means thinking of future. Now together Personal Financial Planning means thinking of future in monetary terms by a person for himself.
Personal financial planning is needed in the today's world, because the expenses are rising of a person due to many reasons, but the income that a person earns is fixed. Thus it becomes necessary for a person to make such arrangements or use such a methodology that helps in meeting all the financial requirements within the earnings circle. Thus personal financial planning refers to the making of plans or policies or decision or strategies that may affect the future in monetary terms or monetary position in comparison to present position by a person for him or his family. The need of personal financial planning, method of making personal financial planning possible and the benefits are necessary to be identified and understood. All these concepts are given below. 2. Need of personal financial planning. The need of personal financial planning arise due to limited income of a person and rising expenditure, that may be due to any of the following reasons.
1. New born in the house.
2. Price hike of the commodities used in the day to day life like bread, butter etc.
3. Emergency expenditure rising out of mishap.
4. Saving for the future expenditure of studies or marriage of the children.
5. Painting the house.
6. Relatives coming to the house.
7. Buying new vehicle.
New admissions required to be made. In any of the above cases the monthly budget of the persons income may rise. In such case a person cannot arrange for credit every time. It also does not look good to a person himself/herself to ask for money and decrease his/her self-respect in the social circle. As the following quote says, God has given hands for giving and not for taking. Therefore it becomes a question of self-esteem for a person to ask for financial aid all the time from friends or relatives. Thus it becomes necessary for a person to make personal financial planning in such a way that all the expenses can be easily met. And along with that self-respect can be maintained. Therefore in todays world it is suggested that instead of becoming help-taker, its better for a person to become help-giver, than only survival is easy. Making personal financial planning easy.
A simple and result oriented method for personal financial planning is to make estimates in the start. Therefore an amount nearly the required amount should be kept separate to meet such expenses. Also amount should be kept to meet emergency requirements. In simple words the Income should be saved as suggested below so that personal financial planning can be made possible. Suppose an Income of a person is 10,000 $, then the possible or suggested budget is as follows. 1. Day to day expenditure on eatables. 6,000$ 2. Expenditure of medicines. 5,00$ 3. Saving for new vehicle or any other demand of the family. 1,500$ 4. Keeping some money at home. 5,00$ 5. Saving for future of the children. 1,000$ 6. Saving for unforeseen requirements that may arise in future. 500$ 10,000$ Methods of personal financial planning. Today various methods of personal financial planning are available. That is if a person finds he/she unable to make personal financial planning than the Policies or Schemes available in the todays world should be fetched.
For instance, for saving for the future of the children, a children plan offered by the insurance policies should be availed. Similarly for saving for some unforeseen requirements, that may arise in the future, a life insurance policy should be made. For saving money from unnecessary expenditure by keeping at home, a saving account can be opened in the bank and with the help of the ATM card, we can get our money at any time. Thus if a person is willing to make personal financial planning then there are many methods available that makes it possible. In case a person has much more extra money as saving than the amount can be invested in buying some property, making fixed deposits etc. Benefits of personal financial planning. There are unlimited benefits of personal financial planning, the need is just the willing of a person to take steps in this way. Following are the various benefits of personal financial planning. 1. Future of the children gets secure. 2. No need to take credits money and pay interest. 3. Unforeseen expenses can be met easily. 4. Saving can be increased. 5. Loopholes in the income can be figured out. 6. All the day to day expenses is met comfortably. 7. New vehicle or any other demand of the family can be achieved easily. 8. The savings in banks generate interest. Extra income can be earned, as property bought at some time, helps in big earning tomorrow.
A person can use it for setting up business, or giving on rent, mortgage or selling at higher price. Self-dependence is achieved. Thus just by taking some steps, personal financial planning can be set up in our life. A person becomes ready to lead a safer and hassle free social life, by making arrangements for all the financial requirements. Conclusion. Thus in conclusion, by making personal financial planning a person can meet all the expenditure coming his/her way that may be in near future or after some big time gap. Various methods for making personal financial planning are available in the todays world. There are unlimited benefits of setting up such process in life. Then only it becomes easy to lead a no-wobbling social life.
Personal financial planning is needed in the today's world, because the expenses are rising of a person due to many reasons, but the income that a person earns is fixed. Thus it becomes necessary for a person to make such arrangements or use such a methodology that helps in meeting all the financial requirements within the earnings circle. Thus personal financial planning refers to the making of plans or policies or decision or strategies that may affect the future in monetary terms or monetary position in comparison to present position by a person for him or his family. The need of personal financial planning, method of making personal financial planning possible and the benefits are necessary to be identified and understood. All these concepts are given below. 2. Need of personal financial planning. The need of personal financial planning arise due to limited income of a person and rising expenditure, that may be due to any of the following reasons.
1. New born in the house.
2. Price hike of the commodities used in the day to day life like bread, butter etc.
3. Emergency expenditure rising out of mishap.
4. Saving for the future expenditure of studies or marriage of the children.
5. Painting the house.
6. Relatives coming to the house.
7. Buying new vehicle.
New admissions required to be made. In any of the above cases the monthly budget of the persons income may rise. In such case a person cannot arrange for credit every time. It also does not look good to a person himself/herself to ask for money and decrease his/her self-respect in the social circle. As the following quote says, God has given hands for giving and not for taking. Therefore it becomes a question of self-esteem for a person to ask for financial aid all the time from friends or relatives. Thus it becomes necessary for a person to make personal financial planning in such a way that all the expenses can be easily met. And along with that self-respect can be maintained. Therefore in todays world it is suggested that instead of becoming help-taker, its better for a person to become help-giver, than only survival is easy. Making personal financial planning easy.
A simple and result oriented method for personal financial planning is to make estimates in the start. Therefore an amount nearly the required amount should be kept separate to meet such expenses. Also amount should be kept to meet emergency requirements. In simple words the Income should be saved as suggested below so that personal financial planning can be made possible. Suppose an Income of a person is 10,000 $, then the possible or suggested budget is as follows. 1. Day to day expenditure on eatables. 6,000$ 2. Expenditure of medicines. 5,00$ 3. Saving for new vehicle or any other demand of the family. 1,500$ 4. Keeping some money at home. 5,00$ 5. Saving for future of the children. 1,000$ 6. Saving for unforeseen requirements that may arise in future. 500$ 10,000$ Methods of personal financial planning. Today various methods of personal financial planning are available. That is if a person finds he/she unable to make personal financial planning than the Policies or Schemes available in the todays world should be fetched.
For instance, for saving for the future of the children, a children plan offered by the insurance policies should be availed. Similarly for saving for some unforeseen requirements, that may arise in the future, a life insurance policy should be made. For saving money from unnecessary expenditure by keeping at home, a saving account can be opened in the bank and with the help of the ATM card, we can get our money at any time. Thus if a person is willing to make personal financial planning then there are many methods available that makes it possible. In case a person has much more extra money as saving than the amount can be invested in buying some property, making fixed deposits etc. Benefits of personal financial planning. There are unlimited benefits of personal financial planning, the need is just the willing of a person to take steps in this way. Following are the various benefits of personal financial planning. 1. Future of the children gets secure. 2. No need to take credits money and pay interest. 3. Unforeseen expenses can be met easily. 4. Saving can be increased. 5. Loopholes in the income can be figured out. 6. All the day to day expenses is met comfortably. 7. New vehicle or any other demand of the family can be achieved easily. 8. The savings in banks generate interest. Extra income can be earned, as property bought at some time, helps in big earning tomorrow.
A person can use it for setting up business, or giving on rent, mortgage or selling at higher price. Self-dependence is achieved. Thus just by taking some steps, personal financial planning can be set up in our life. A person becomes ready to lead a safer and hassle free social life, by making arrangements for all the financial requirements. Conclusion. Thus in conclusion, by making personal financial planning a person can meet all the expenditure coming his/her way that may be in near future or after some big time gap. Various methods for making personal financial planning are available in the todays world. There are unlimited benefits of setting up such process in life. Then only it becomes easy to lead a no-wobbling social life.
