What is the first step in financial planning quizlet?

What is the first step in financial planning quizlet?

The first step of financial planning is to determine your current financial status. A new car is an example of a need. Saving money for the holidays is an example of a long-term goal. The main cause of inflation is an increased demand without an increase in supply.

What are stages of financial planning?

Financial Planning is the process of estimating the capital required and determining it’s competition. It is the process of framing financial policies in relation to procurement, investment and administration of funds of an enterprise. Step 2 in Financial Planning: Gather the Relevant Data. 3.

What is the basic content of a financial plan?

The main elements of a financial plan include a retirement strategy, a risk management plan, a long-term investment plan, a tax reduction strategy, and an estate plan.

Which of these are the first two pieces of a financial planning process?

The financial planning process is a logical, six-step procedure:

• (1) determining your current financial situation.
• (2) developing financial goals.
• (3) identifying alternative courses of action.
• (4) evaluating alternatives.
• (5) creating and implementing a financial action plan, and.
• (6) reevaluating and revising the plan.

What are the 6 Steps to a Winning spending plan?

Building a Spending Plan: All Six Steps 1

• Step 1—What Are Your Financial Goals? Everybody needs to learn how to manage money.
• Step 2—Where Is Your Money Going?
• Step 3—How Much Is Your Total Income?
• Step 4—How Much Are Your Fixed and Flexible Expenses?
• Step 5—Are You Living On What You Make?
• Step 6—Sticking to Your Plan.

What two things should be included in a budget?

Your needs — about 50% of your after-tax income — should include:

• Groceries.
• Housing.
• Basic utilities.
• Transportation.
• Insurance.
• Minimum loan payments. Anything beyond the minimum goes into the savings and debt repayment category.
• Child care or other expenses you need so you can work.

What are the two types of financial goals?

Financial goals can be divided into two categories, including short -term goals and long-term goals. Each of these types of goals has different time frames, and your plan should incorporate both.

What are 3 different types of financial goals?

Examples of different types of financial goals include:

• Improve your financial literacy.
• Create a budget.
• Save for retirement and other long-term plans.
• Save for short-term and mid-term plans.
• Pay off debt.
• Build good credit.
• Make more money.
• Create an estate plan.

What kind of financial goals should I set?

The biggest long-term financial goal for most people is saving enough money to retire. The common rule of thumb that you should save 10% to 15% of every paycheck in a tax-advantaged retirement account like a 401(k) or 403(b), if you have access to one, or a traditional IRA or Roth IRA.

What do you need to do to achieve your financial goal?

Use these 10 Basic Steps to help you get smart about your money.

1. What’s Behind Your Financial Decisions.
2. Get Organized.
3. Know Where Your Money Goes.
4. Shop Smarter.
5. Review and Reduce Your Debt.
6. Build a Strong Credit Report.
7. Save For Your Future.
8. Set Financial Goals.