Personnal Financial Essay

7511 Words May 7th, 2012 31 Pages
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PERSONAL FINANCIAL PLANNING IN ACTION
Developing a Personal Financial Plan
Starting Point
Go to www.wiley.com/college/bajtelsmit to assess your knowledge of developing a personal financial plan. Determine where you need to concentrate your effort.

What You’ll Learn in This Chapter
▲ Personal financial planning and decision-making strategies ▲ Factors that influence financial planning ▲ The stages of successful financial planning

After Studying This Chapter, You’ll Be Able To
▲ ▲ ▲ ▲ List the five steps in the personal financial planning process Examine the factors that influence personal financial planning decisions Begin to construct a comprehensive financial plan
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These questions are all related to personal finance—a specialized area of study that focuses on individual and household financial decisions, such as budgeting, saving, spending, insurance, and investments. Understanding these topics will help you in many ways. For example, you’ll make better decisions when you buy an auto, shop for a home mortgage, choose a career, and save for retirement. You may also be able to pay less in taxes and interest. Personal financial planning is the process of developing and implementing an integrated, comprehensive plan designed to meet financial goals, to improve financial well-being, and to prepare for financial emergencies. The primary goal of personal financial planning is to develop and achieve financial goals, such as ▲ ▲ ▲ ▲ Buying a first home or a bigger home. Making a major consumer purchase. Supporting a growing family. Preparing financially for retirement.

People who have their finances in order gain important social and psychological benefits as well. Generally, they feel less stressed and experience improved

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1.1 THE PERSONAL FINANCIAL PLANNING PROCESS

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Figure 1-1
S te p 2. D e v e l o p g o a ls.

. S te p 1 rrent yo ur cu a l y z e n c e s. An na fi

Step 3. Identify and evalu ate strategies to achie ve your goals.

Step 4. Estab implem lish and ent y our plan .

Step 5. Reevaluate and

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