people make plans for their life and factor these into their financial budgets. which may include marriage, holiday or retiring. but life doesn't always work out as expected. some people don't make any medium term or long term plans and prefer making provision for the short term and leave the rest to take care of its self.

someones life cycle may differ from what they expected in several ways. its not possible for someone to make a budget for every life event that's about to happen but its good to have flexibility in case of an event so they will be prepared should also be prepared to alter their plan and their priorities when there are major changes.
some event could be good such as someone winning the lottery, but also can be bad because someone might try and kill you or the partner your with can sue you for the money.

the need of flexibility is not only for unexpected events but its necessary to build into a plan the fact that several variables are being assumed and that one or more of these might change, maybe affecting them negatively and positively. changes in the interest rate and other variable impacts on borrowing and saving goals.

debt becomes a problem when someone fails to manage it properly. they get trapped in a spiral of debt. if you fail to pay the debt the first month then it will carry on to the next month. effectively reducing their income before it is even earned. poor debt management has serious consequences.

plans which are laid down over a long period of time by nature is less flexible than short-term ones. when making a budget they need to take into account their health and their family now and in the future. business owners need to be aware of how their business interlinks with their personal finances and an important factor for a business could be if it is a limited company or not. meaning the liability of the business for debt is limited to the amount of money the business can raise by selling their assets. and if the business is not limited then they will have to use their personal possessions to pay of their debt.

"what if" is a function on a spreadsheet whereby the user can st out a table of calculations and then change on of the variables to see "what" the effect will be on the final results "if" certain changes happen.

interest rate across the financial services market generally change when the bank of England decides to make changes in the bank rate. they may not change straight away but over time they will usually go up or down to reflect the change. increase in interest rates can affect anyone that are repaying their loan with a variable, this is because their repayment will increase. the decrease in interest rate will have an opposite affect.

the rate of inflation measures the speed at which the prices increase. if peoples income rises more slowly than prices, they suffer a fall in their real standard of living and are not able to buy the same amount of goods and services.this is bade for people with fixed incomes, such as retired people. the retired people get payed the same each time however the goods and services keep increasing so they wont be able to buy as much good as they used to.

the exchange rates of a currency is its price in terms of other currencies exchange rate only impact people that go abroad, or for some other reason. if the pound sterling falls in terms of another currency such as the US dollar or the euro, it is worth less.

some people rely on state benefits for their income, the amount they are entitled to receive therefore depends on the policy of the government that happens to be in power. this makes long- term planning difficult because people do not know what will happen to benefit rates or entitlement s in the future. A change of government might mean changes in social security policy. This is a medium term risk in the UK because a general election has to be held at intervals of no more than 5 years.

once someone has begun to on top of their outstanding debts, they can be solvent again. if they were declared bankrupt, then their debts will have been written off. their record stays the same for 6 years and i may be that they won't be able to borrow until the time has passed. use the period to pay off the debts to get back into balance. once they are solvent again, it is important for them to rebuild their credit history.

in the past people used cash, they were paid in cash and spent cash in shops. didn't leave any written record of transactions other than paper form, now it's all electronically paid which means that most transaction databases and records are kept. a person's financial footprint has an impact on their financial future in a number of ways. such as trying to borrow money which then has a knock-on effect such as not being able to get a mortgage to buy their home. and so they will have to save up for something big rather than borrowing and paying back over time. for people who have a credit rating that is positive enough for them to be able to borrow, the second effect of the financial footprint is on the price they pay for credit. for people who have credit rating that is poor are refused credit cannot borrow and therefore cannot buy the product they want to or fulfil their aspirations. if they need to borrow desperately, then the consequence might be that they will have to go to a money lender or a payday loan company which will charge an extremely high interest and may use aggressive money techniques.

being made redundant means being fired from their job and so this is a very bad event for someone who has loans or a mortgage to pay. if someone is made redundant then they will have to find a job and this will take some time and they will have to pay for living expenses and so they will be given a redundancy pay, and this will tide them over for a period. they are going to have to make plans for how they are going to spend the money and make the money last longer. f they were working part time then they won't be entitled to have a redundancy pay, and same with a self-employed person whose business has failed. while a person is unemployed, they will be. entitled to draw unemployment benefits and perhaps other benefits such as housing benefit. Universal credit is being introduced gradually.

when two people live together, their joint income, usually, is used to cover expenditure. if they split up and one person moves out, it creates a major financial problem. rent mortgage payments remain the same, as does home insurance, but now there is only one income to cover them. when a couple has a child, the situation becomes more complicated. the parent who has care of the child most of the time can claim financial support from the other parent. there might be additional childcare expenses if both parents now need to work full time has to get a part-time job.