Page 19 - DMGT515_PERSONAL_FINANCIAL_PLANNING

Personal Financial Planning

Notes
The keys to financial planning aren’t all about investments and saving, it includes fun and
taking care of others as well. Do not be afraid to ask questions and read more about
financial planning. The earlier you plan the better it will be for you.

Questions
1. What are the keys to financial planning a newbie at work should know?
2. What is the importance of personal financial planning?

1.7 Summary

Personal financial planning is the process of managing your money to achieve personal economic
satisfaction. This planning process allows you to control your financial situation. Every person,
family, or household has a unique financial position, and any financial activity therefore must
also be carefully planned to meet specific needs and goals. A comprehensive financial plan can
enhance the quality of your life and increase your satisfaction by reducing uncertainty about
your future needs and resources.
The personal financial planning process is according to ISO 22222:2005 six-step processes which
are as follows:
(1) Determining your current financial situation
(2) Developing financial goals
(3) Identifying alternative courses of action

(4) Evaluating alternatives
(5) Creating and implementing a financial action plan, and
(6) Reevaluating and revising the plan.
A financial planner or personal financial planner is a practicing professional who helps people
deal with various personal financial issues through proper planning, which includes: cash flow
management, education planning, retirement planning, investment planning, risk management
and insurance planning, tax planning, estate planning and business succession planning (for
business owners).

1.8 Keywords

Financial Planner: A financial planner or personal financial planner is a practicing professional
who helps people deal with various personal financial management issues.

Financial Planning: Financial planning is the process of meeting your life goals through the
proper management of your finances.
Personal Financial Planning: Personal financial planning is broadly defined as “a process of
determining an individual’s financial goals, purposes in life and life’s priorities, and after
considering his resources, risk profile and current lifestyle, to detail a balanced and realistic
plan to meet those goals.”

1.9 Review Questions

1. What is Personal Financial Planning?
2. Why should everyone do personal financial planning?

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