Failure is often the result of not planing or poor planning!
As individuals and family units, we are confronted with rapid economic and financial variations which make financial planning increasingly necessary for survival and or prosperity. It is thus critical for every income earning individual to familiarize him or herself with personal financial planning, so that the planner can interrogate the subject when necessary.
One could start by making it a habit to draft a personal monthly budget, making sure you enter as accurately as possible all expenditure items, and taking ownership of this exercise because, not only is it the threshold of financial planning, but also because without a budget, your personal financial management veers off track and the consequences thereof are obvious.
The personal financial planning process should ideally also include a personal or family unit budget.
Budgeting, in the context of an individual person or family unit, is a forecast or an expression of a planner’s financial intention based on what he or she intends to attain over a specified period. Such expression focuses on expenditure measured against income.
The Personal Financial Planning(PFP) is a process through which the client’s financial situation is assessed, goals identified and strategies developed to achieve, within a specific time frame, the goals set.
The process calls for reasonable knowledge of the following subjects:
- Taxation
- Budgeting
- Risk management
- Investment analysis
- Estate planning
Clients can derive the following benefits from personal financial planning:
- Safeguarding their assets from risk
- Assists in identifying and achieving their financial goals.
- Providing for survivors
- Ensuring funding for children’s education
- Providing for loss of income at disability
- Realize better return on investment
- Minimize tax obligation
- Ensure the smooth transfer of property in accordance with the wishes of the planner at death.
- Budgets
