Financial Planning Personal Finance is the application of the principles of finance to the monetary decisions of an individual or family unit. It addresses the ways in which individuals or families obtain, budget, save, and spend monetary resources over time,taking into account various financial risks and future life events. Components of personal finance might include checking and savings accounts, credit cards and consumer loans, investments in the stock market, retirement plans, social security benefits, insurance policies, and income tax management. Personal Financial Planning
1.Assessment: One's personal financial situation can be assessed by compiling simplified versions of financial balance sheets and income statements. A personal balance sheet lists the values of personal assets , along with personal liabilities . A personal income statement lists personal income and expenses. 2.Setting Goals: Setting financial goals helps direct financial planning. 3.Creating a Plan: The financial plan details how to accomplish your goals. 4.Execution: Execution of one's personal financial plan often requires discipline and perseverance. Many people obtain assistance from professionals such as accountants, financial planners, investment advisers, and lawyers. 5.Monitoring and Reassessment: As time passes, one's personal financial plan must be monitored for possible adjustments or reassessments.
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