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Personal Financial-Planning

The document discusses several key factors that affect financial planning: family structure, health, career choice, age, the business cycle, employment rates, currency values, inflation, and deflation. It also outlines the basic steps in the financial planning process: defining goals, assessing one's current situation, identifying choices, evaluating alternatives, choosing a path, and reassessing. Financial planning is an ongoing process of management and adaptation to changing needs, priorities, and economic conditions over a lifetime.

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Gladz De Chavez
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377 views20 pages

Personal Financial-Planning

The document discusses several key factors that affect financial planning: family structure, health, career choice, age, the business cycle, employment rates, currency values, inflation, and deflation. It also outlines the basic steps in the financial planning process: defining goals, assessing one's current situation, identifying choices, evaluating alternatives, choosing a path, and reassessing. Financial planning is an ongoing process of management and adaptation to changing needs, priorities, and economic conditions over a lifetime.

Uploaded by

Gladz De Chavez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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FINANCIAL

PLANNING
FACTORS AFFECTING FINANCIAL
PLANNING
• Family Structure
• Health
• Career Choice
• Age
Family Structure
Marital Status and dependents,
such as children, parents or
siblings, determine whether
you are planning only for
yourself or for others as well.
Health
Your health is another
defining circumstance that
will affect your expected
income needs and risk
tolerance and thus your
personal financial planning.
Personal financial planning
should include some
protection against the risk of
chronic illness, accident or
long term disability.
Career Choice
Career choice affects your
financial planning, specially
through educational
requirements, income
potential and characteristics
of the occupation or
profession your choose.
Age
Needs, desire, values and
priorities all change over a
lifetime and financial concerns
accordingly. Ideally personal
finance is a process of
management and planning that
anticipates or keep abreast with
changes.
Factors Affecting Financial Thinking
• Business cycle
• Employment rate
• Other indicators of economic health
• Currency value
Business Cycle
An economy is productive
enough to provide for the wants
of its member. Normally,
economic output increases as
population increases or as
people’s expectations grow.
Employment rate
An economy produces not just
goods and services to satisfy its
members but also jobs, because
most people participate in the
market economy by trading
their labor and most rely on
wages as their primary source
of income.
Other Indicators of Economic Health
Other economic indicators give us clues as to how successful our economy
is, how well it is growing or how well positioned it is for future growth. This
includes statistics, consumer confidence, producer prices and so on.
Currency Value
Stable currency value is an
indicator of a healthy economy
and critical element in financial
planning. Like anything else the
value of currency is based on its
usefulness.
Purchasing power
A currency usefulness is based
on what it can buy the more
currency you can buy the more
useful and valuable it is.
Inflation
The currency is less in value
because it is less useful, that is
less can be bought with it. Prices
are rising it takes more units of
currency. To buy same amount of
goods.
Deflation

When the value of the currency increases, prices are falling


thus currency is worth more and buys more.
Planning Process
• Defining goals
• Assessing current situation
• Identifying choice
• Evaluating choices
• Choosing
• Assessing the resulting situation
Planning Process
• Redefining goals
• Identifying new choices
• Evaluating new choices
• Choosing
• Assessing the resulting situation over and over again
Defining Goals
Figuring out where you
want to go.
Assessing the current situation

Involves understanding what your present situation is


and the choices that creates. There many choices but
you want to identify those that will be most useful in
reaching your goals.
Evaluating alternatives and making
choices
Figuring out how to go from here to there is a process of identifying
immediate choices. You have to be realistic and yet imaginative about your
current situation to see the choices it presents and the choices that current
choices it may create.

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