Financial Planning - E-Commerce - Lecture Slides, Slides of Fundamentals of E-Commerce

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Chapter 1

Financial Planning:The Ties That Bind

The Role of Personal Financial Planning • To manage income and expenses.

To create an awareness of your currentfinancial status. - To plan for the future by developing goals anddevising ways to achieve those goals. - To provide a system of evaluation and revisionfor your financial progress.

Why Should You Develop a Personal Financial Plan?

It helps you achieve your financial goals. - It helps you achieve financial independence. - It helps you understand where all your moneyis spent. - It may even help you support those that havesupported you.

Why Isn’t Personal Financial Planning Easy?

Some people are uncomfortable discussingfinancial matters, the “fear of finance.” - Motivation and time is required to completean accurate plan. - Good record keeping is necessary both beforeand during the planning period.

The Personal Financial Planning Process

Step 1: Evaluate Your Financial Health - Step 2: Define Your Financial Goals - Step 3: Develop a Plan of Action - Flexibility, Liquidity, Protection, Minimization of Taxes - Consider Your Goals - Step 4: Implement Your Plan - Step 5: Review Your Progress, Reevaluate, andRevise Your Plan

Step 1: Evaluate Your Financial Health

Evaluate yourcurrent situation:income, spending,wealth - Assess your wholefinancial picture

What Are the Time Horizons for Financial Goals?

Short-term goals can be accomplished withina 1-year period. - Intermediate-term goals take 1-10 years toaccomplish. - Long-term goals take more than 10 years toachieve.