What Is The Purpose Of A Financial Plan Quizlet?

What is the purpose and function of a financial plan?

A financial plan is a document containing a person’s current money situation and long-term monetary goals, as well as strategies to achieve those goals.

A financial plan may be created independently or with the help of a certified financial planner..

Why is it important to communicate your financial plans?

(a) Why is it important to communicate your financial plans? ​Because, by communicating your goals and plans to your​ family, you can avoid some conflicts over the decisions you make.

What is a financial plan quizlet?

(also referred to as personal financial planning) the process of planning your spending, financing, and investing to optimize your financial situation. personal financial plan. a plan that specifies your financial goals and describes the spending, financing, and investing plans that are intended to achieve those goals.

What is the purpose of a financial plan?

The purpose of a financial plan A comprehensive financial plan helps you meet your current financial needs and prepare for financial stability in the future. The work involved in creating a financial plan will guide the investment plan and eventually the retirement plan. It also influences tax and estate planning.

What are the 5 steps to financial planning?

5 steps to financial planning successStep 1 – Defining and agreeing your financial objectives and goals. … Step 2 – Gathering your financial and personal information. … Step 3 – Analysing your financial and personal information. … Step 4 – Development and presentation of the financial plan. … Step 5 – Implementation and review of the financial plan.

What is the most important financial goal that must be set first?

The biggest long-term financial goal for most people is saving enough money to retire. The common rule of thumb that you should save 10% to 15% of every paycheck in a tax-advantaged retirement account like a 401(k), 403(b), or Roth IRA is a good first step.

What is the first step in the financial planning process?

The financial planning process is a logical, six-step procedure:(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.

What is the main goal of financial planning quizlet?

One aspect of financial planning is to control your use of credit. Which aspect of financial planning does this deal with? The main goal of personal financial planning is: A) saving, spending, and borrowing based on current needs.

What are the three different types of financial goals?

What are financial goals? Your financial goals are where you would like to be financially in the short-term, mid-term, and long-term. If you do not have financial goals that you are working towards, you will be likelier to spend more than you should.