The scope of personal financial planning

Monday June 13, 2016 / RA Bridges & Alero Awoyemi

Personal financial planning is the foundation on which family and personal wealth are built. It is the instrument with which we can efficiently manage our economic resources and thus achieve our financial goals. In recent years, the process of family-oriented financial planning has grown in importance in many regions of the world as it contributes to their progress. This is because the growth of the base business (family) has a positive impact on the whole environment and is reflected in the economy of the country. It is no coincidence that this discipline is growing rapidly in industrialized countries.

What is the scope of personal financial planning?
This discipline covers the basic areas of an individual or family’s economic well-being, covering the eight (8) basic human needs. These are:

Basic Financial Planning – Savings and Loans

Essential Assets Planning Homes

Insurance planning – insurance

Investment planning – investments

Retirement Provision – Retirement / Annuities

Estate Planning – Homes

Tax planning – taxation

Health planning – health

What is the purpose of basic financial planning?
Basic financial planning is the most basic part of personal finance. It consists of a person’s plans, activities, and actions in their daily money use: cash management, checking account, credit / debit cards, personal balance, budget, income statement, etc. Financial planning will provide the tools and processes to keep these tasks tidy and to be carried out systematically.

What is the purpose of essential asset planning?
This part of the planning focuses on the plans and strategies a person should put in place to purchase the essential goods essential to ensuring a good quality of life: a home, vehicle, furniture, electronic equipment, appliances, and other assets who have favourited A family must feel like they have a home and a comfortable life.

What is insurance planning?
Insurance planning is about the precautions a person should take to anticipate their family and protect them from potential risks that could endanger their wellbeing. Risk management is an essential part of personal financial planning. This helps people determine what emergency measures to take directly and which ones to share with an insurance company. In this part of the world we have found that many people are unfamiliar with this aspect and do not see the need for insurance.

What is investment planning?
Investment planning is a process that aims to help people invest their savings efficiently. It has the tools in place to help people develop effective investment strategies that will allow them to get the best performance, that is, the maximum return at a risk that any person can handle.

What is retirement planning?
A retirement plan, also known as a retirement plan, is just another name for a long-term investment plan. The aim is to accumulate the necessary capital in order to achieve a profit that replaces regular income after the end of active working hours.

What is estate planning?
Estate planning goes beyond simply distributing the inheritance. It includes other topics such as managing our goods and looking after our relatives in the event of a serious illness, senility or intellectual disability and of course the will.

What is tax planning?
Tax planning will help you find strategies to reduce your regular tax payments. The state plays an important role in our financial plan. On the one hand, it determines the socio-economic environment and its policies and regulations, and it also provides us with the macro-infrastructure and services that enable businesses to thrive and generate income for both owners and employees. It also provides direct income to many people. It is our duty to contribute to the national fund by sharing some of our profits. However, we should do this intelligently so that we pay.

In order to be able to take your financial future into your own hands, the subject of personal financial planning is a very serious topic that should not be overlooked. As typical Nigerians, we are not known for setting up a personal financial plan and adhering to it religiously. If we could have done this, many of us would not be under so much pressure to stay afloat during this difficult time in this nation’s life.

However, it is never too late to get started. As part of the Proshare Education, Enlightenment and Empowerment campaign, we would look at the various aspects of personal financial planning and how we can apply the core principles to our daily lives.

It is time to take responsibility for your financial future rather than blaming others (either the government for the guidelines you put in place, your family members for not helping when they should have helped, or your father for it that he did not position himself to set aside for inheritance for you – but when you look at it, what are you setting aside for your children or your friend for cheating on you or your spouse for failing She believes and gives up on your dreams.) There is enough blame on you walking around, but the key is that ONLY you are responsible for your life and financial future.

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