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Personal Finance Basics and the Time Value of Money - Coggle Diagram
Personal Finance Basics
and the Time Value of Money
Developing Financial Planning Goals
Timing of Goals
Short-term, intermediate and long-term goals
Goal Setting Guidelines:
state in specific terms
have time frame
realistic
have action to be taken
Types of Financial Goals
Influence by the financial needs
Influence by time frame
Goals for Different Financial Needs
Consumer product goals
Durable-produce goals
Intangible purchase goals
Personal Financial Planning
the process of managing your
money to achieve personal economic satisfaction.
Advantages:
Sense of freedom from financial worries
6 Steps Procedure of Financial Planning:
Identify alternative courses of action
Evaluate your alternatives
Develop your financial goals
Create and implement your financial action plan
Determine your current financial situation
Review and revise your plan
Increase control of one’s financial affairs
Improved personal relationships
Increased effectiveness in obtaining, using and
protecting financial resources
Opportunity Costs and the Time Value of
Money
Personal Opportunity Costs
Financial Opportunity Costs
Influences on Personal Financial
Planning
Global Influences
Economic Conditions
Consumer price
Consumer
Interest rates
Economic Factors
Achieving Financial Goals
Developing a Flexible Financial Plan
Implementing Your Financial Plan
Components of Personal Financial Planning
Planning
Spending
Obtaining
Managing risks