Personal finance and financial planning is a very good aid in evaluating your financial status before going for any kind of loan.?Every person wants to lead a luxurious life. He wants to have his own house and his own car. The rates of property and vehicles are going up so high up that it?s not possible for everyone to save money and buy them. Instead taking a home loan or a car loan is a better option and most people are opting and benefitting from it. Apart from having a house and a car there are other luxuries or necessities which require a considerable amount of money. Before taking a loan for fulfilling these requirements, people tend to use the Personal finance services offered by banks and other financial firms.
Personal finance?is the process of applying the financial principles on the economic decisions of an individual or a family. It is important for an individual or a family to know that where he stands in his financial terms and how much loan he can take. In case he is unable to re-pay the loan, what he can do and how, is calculated through Personal finance assessment.
Personal finance assessment deals with the individual?s or family?s earned and uses their monetary resources in a particular course of time. It also considers the future of life and financial jeopardy. The process of Personal finance may include checking of savings account, any type of personal loans, credits cards, stock market investment, insurance plans and tax management.
The most important process of Personal finance procedure is financial planning. It involves the following the steps:
Assessment of Personal finance:?It involves construction of a simple income statements and balance sheet which displays the assets and liabilities of an individual or a family. Assets include property, house, cars, stock, bank account etc. Liabilities include loans, credit cards, mortgage etc.
Goal Setting:?The objective of the Personal finance process should be clear. They can be mixed also, short term or long term. The main objective of goal setting is to fulfill certain financial requirements.
Plan Creation:?This process includes the planning as to how the goal will be achieved. It includes decreasing the unnecessary expenses or liabilities and increasing the personal income through various means.
Plan execution:?As the name suggests, working on the plan execution for the achievement of the set goals is done in this process.
Re-assessment and monitoring:?Personal finance and financial planning is not just a onetime process, it requires regular check-up and monitoring for obtaining the upto date values of Personal finances.
Taking a personal loan may be a just luxury for someone and for another person it may be a necessity. But the conditions applied by the bank for the loans is same for every individual and there is no relaxation in the ROI in any case, hence it become important for individual to get his Personal finance assessment done.
Source: http://proadblog.com/personal-finance-is-a-fashion-these-days/
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