It is the financial management that any individual or a family is required to obtain, budget, save and spend monetary resources over time, which takes into account the various financial risks and the future live events. The basic information is provided by the mutual fund adviser while considering any personal finance the individual would consider the suitability to his or her needs of a range of banking products like checking, saving accounts, credit cards and consumer loans or investments like stock market, bonds and mutual funds and insurance like life insurance, health insurance and disability insurance products or participation and monitoring of individual or employer sponsored retirement plans, social security benefits and income tax management.
Personal financial planning process:-
The key components of personal finance are the financial planning through a financial adviser that is a dynamic process which requires monitoring and reevaluation it includes certain steps like:-
- Assessment , which is assessed by compiling simplified versions of financial statements that include balance sheets and income statements , where the personal balance sheet lists the values of personal assets with other personal liabilities. The personal income statement lists the personal income and expenses. The mutual fund advisor is going to bring on every information relating to the provision of finance and their utility to saving in a proper manner.
- Goal setting: – these sets the particular goals as there are multiple goals in common that include a mix of short term and long term goals. This goal setting is done with an objective to meet certain financial requirements.
- Creating a plan: – this is a strategy that is set to accomplish the goals that includes the reduction of unnecessary expenses, increasing the employment income or investing in stock market.
- Execution: – the execution process of any financial plan requires discipline and perseverance. Many people obtain this assistance from professionals like the accountants, financial planners, investment advisers and lawyers.
- Monitoring and reassessment: – as the time moves on the financial plan must be monitored for possible adjustments or reassessments.
Keys of personal finance:-
The key areas of personal financial planning that is being provided by a financial adviser are being designed and suggested by the financial planning standard board that are like the financial position , adequate protection , tax planning , investment and accumulation goals, retirement planning and estate planning.
Merits of personal finance:-
The merit of personal finance is it helps to balance the financial system of a family and the person itself. It also makes the management of finance and the family expenditures easy to manage and it also provides a benefit to plan for a better future and sometimes these also gives a good amount of interest for the person and plan how to invest the money in proper manner for the benefit of the members of the family. Personal finance is the only way for the people belonging to middle and higher middle class to make their money grow in a proper manner and in a proper investment procedure. Mutual fund is going to bring on a target to save more of money every time. This is really an interesting episode being taken to consideration every time.