FINANCIAL PLAN:

A financial plan is a comprehensive analysis of the money that is essential to

the financial planning process. It contains information on the assets, debts,
financial goals, and plans to accomplish them.

There is no correct or incorrect method to accomplish it. The strategy should

be tailored to the specific financial requirements.

STEPS TO MAKE A FINANCIAL PLAN:

 Set financial objectives
 Figure out what to do next
 Keep track of the money
 Make a budget for the family
 Pay off all the outstanding debts
 Make an emergency fund
 Save or invest for the long term

ADVANTAGES OF FINANCIAL PLANNING:

1. Financial planning assists people in setting and achieving their objectives:

Individuals may use financial planning to define and set objectives for
themselves. Goals provide people with direction and purpose in their life. When
people have specific goals in mind, they have something to focus on.

Financial objectives are essential for anyone who want to live a secure and
fulfilling life. Personal finances are an integral element of everyone's life since
money is frequently used as a vehicle to assist people attain their most treasured
life objectives.

It's especially vital to strike a balance between short-term, medium-term, and

long-term goals and your money.

2. Financial plans can be a great motivator and source of engagement:

 People are less likely to be motivated when they lack clear goals and are
unsure of what is expected of them. A financial plan lowers financial uncertainty
by offering clarity and identifying what they are expected to achieve. 

3. Financial plans serve as a framework for activity and decision-making:

Financial strategies can guide actions in the direction of desired objectives. 

When efforts are coordinated and targeted toward specified goals, they are far
more successful.

Taking action on financial decisions might be difficult for a variety of

reasons. Personal finances sometimes include phrases that many people are
unfamiliar with.

This causes an even bigger difficulty when people consider that financial
decisions are frequently huge decisions with long-term consequences, either
negatively or positively affecting them.

4. Financial planning often provides emotional and mental health advantages:

Having a comprehensive financial plan has emotional and mental health

advantages. Individuals who have a plan are less anxious and more hopeful about
their future than those who do not have a financial plan.

Having a financial plan to which people can refer helps raise mindfulness
about their own finances, which in turn reduces financial stress.

5. Financial planning improves financial outcomes:

A financial plan frequently improves financial outcomes over time. Those

who plan ahead of time are more likely to be financially prepared for emergencies
and retirement.

A financial plan enables one to start with the final goal in mind. This
provides people with the necessary perspective to balance their current objectives
and wants with their future goals and requirements. A plan enables individuals to
focus on both the now and the future.
ASSUMPTION:

Present situation:
FINDINGS:

Liabilities: There is currently only one loan, which is an educational loan taken
out for educational purposes.

Loans Current Outstanding

Rs. 1,69,000 Rs. 1,69,000

RECOMMENDATIONS:

Emergency Fund: Mr. X needs to maintain some emergency fund which

will help him to exist for a few months even if you lose his work or if
anything unforeseen occurs.
Health Insurance: Mr. X needs to invest in health insurance which will
provide him with a much-needed secure income in the event of a medical
emergency. Uncertainty and health hazards are inevitable aspects of life.
And health insurance can either repay the covered for medical expenditures
incurred as a result of illness or accident, or it can pay the care provider
directly.
 Life Insurance: Mr. X has to include life insurance as part of financial
planning, as it may aid in asset growth, maintenance, and providing access
to liquidity at the appropriate moment.

FINANCIAL GOALS:

1. Education (2022 – 2024)

Current Value is Rs. 200000

Future Value will be Rs. 252942

As the 1st year educational expense is fast approaching Mr. X needs to use the
money which he has in hand and should start saving a minimum of Rs. 5000 for
the next two years.

2. Marriage (2024)

Current Value is Rs. 600000

Future value will be Rs. 654000

As it has a little extra time Mr. X can start to save money for next 4 years and he
can also invest money in fixed deposits or in mutual funds.

CONCLUSION:

A personal financial plan is an important component of financial success.

This strategy must contain financial objectives for each stage of life. Money will
be irresponsibly spent if there are no financial goals to work towards.

These financial objectives will have an impact on all financial decisions

made. Once these goals have been developed, it is critical to evaluate them on an
annual basis and make any required revisions.
PLAGIARISM: