These risks can be divided into the following: liability, property, death, disability, health and long term care. Adequate protection: the analysis of how to protect a household from unforeseen risks.From this analysis, the financial planner can determine to what degree and in what time the personal goals can be accomplished. Household cash flows total up all from the expected sources of income within a year, minus all expected expenses within the same year. Net worth is a person's balance sheet, calculated by adding up all assets under that person's control, minus all liabilities of the household, at one point in time. Financial position: is concerned with understanding the personal resources available by examining net worth and household cash flows.The six key areas of personal financial planning, as suggested by the Financial Planning Standards Board, are: Personal finance may also involve paying for a loan, or debt obligations. health and property insurance, investing and saving for retirement. Personal finance may involve paying for education, financing durable goods such as real estate and cars, buying insurance, e.g. Planning a secure financial future in an environment of economic instability.Development of a savings plan or financing for large purchases (auto, education, home).Effects of credit on individual financial standing.Effects of tax policies (tax subsidies or penalties) management of personal finances.Transference of family wealth across generations (bequests and inheritance).Protection against unforeseen personal events, as well as events in the wider economies.Questions in personal finance revolve around: Finance can be broken into three sub-categories: public finance, corporate finance and personal finance. Finance aims to price assets based on their risk level and their expected rate of return. Finance can also be defined as the science of money management. It includes the dynamics of assets and liabilities over time under conditions of different degrees of uncertainty and risk. Click here for a List of Financial Categories.įinance is a field that deals with the study of investments.
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