Module 1

FINANCIAL PLANNING
 Topics
- The life cycle of financial planning
- Personal Financial Planning/ Process
- Advantages of Financial Planning
- Financial Problems and difficulties and steps
to overcome
 Learning Outcomes
• Explain the life cycle of financial planning
• Recognize the advantages of financial
planning
• Describe the entire financial planning
• Identify financial problems and propose
solutions to these problems
 Planning is a
systematic way of
deciding about and
doing things in a
purposeful manner.

Financial Planning
It is the
development and
implementation of
total coordinated
plans for achieving
one’s overall
financial objectives.
 Financial Planning
Cycle
-------------------------
 Asset - Accumulation-
When you are earning
and accumulating assets,
you are likely focused on
long-term growth

 Wealth Protection- goes

hand-in-hand with the
asset accumulation
phase

 Retirement Distribution

 Estate Transfer
1. Financial goal- it is a target to aim for when managing
your money. It can involve saving, spending, earning or
even investing.
3 Types of Financial Goals

 Short-term goals- These are smaller financial targets

that can be reached within a year

 Mid-term goals- Typically, midterm goals take about five

years to achieve. A little more expensive than an
everyday goal.

 Long-term goals- This type of goal usually takes much

more than 5 years to achieve.
2. Develop financial
plan and strategies
to achieve goals
--------------------------
Strategic Financial
Planning is the
process of determining
how a business
manages itself
financially to ensure it
achieves its goals and
objectives for both the
short-term and long-
term.
 3. Implement
financial plans and
strategies
--------------------------
Formulate specific
financial plans
which then helps
you to implement
those plans to
financial strategies
 4. Periodically
develop and
implement budgets to
monitor and control
progress towards
goals
-------------------------

Budget
monitoring involves
examining
monthly monitoring
reports and taking
action to tackle any
significant variances.
5. Use financial statements to evaluate results of
plans and budgets, taking corrective action as
required- Financial Statements are the reports that
provide the detail of the
entity's financial information including assets,
liabilities, equities, incomes and expenses,
shareholders' contribution, cash flow, and other
related information during the period of time.
6. Redefine goals
and revise plans
and strategies as
personal
circumstances
change
I. Advantages of effective personal financial planning

 Increased effectiveness in obtaining, using , and

protecting your financial resources throughout your life
 Increased control of your financial affairs by avoiding
excessive debt, bankruptcy and dependence on others
 Improved personal relationships resulting from well-
planned and effectively communicated financial
decisions.
 A sense of freedom from financial worries obtained by
looking to the future anticipating expenses and achieving
personal economic goals.
 Most common Financial problems and difficulties

• Some situations that might

cause financial stress includes losing your
job or being retrenched, long term
unemployment, being unable to get full
time work, inability to pay your bills or not
being able to deal with the increasing
costs of living.
 HOW TO REDUCE MONEY STRESS
• Identify the needs of most attention- Write down
your three biggest money challenges so you know
what you’re up against. Whether it’s making your
monthly bill payments, reducing credit card debt, or
saving for retirement.

• Try to stay positive- Your mindset can help keep you

motivated to fix your financial problems.
Rather than get bogged down by thoughts of never
getting out of debt, imagine the amount of stress you
feel decreasing as your debt load gets smaller and
smaller.
• Be realistic- Determine what you can reasonably
achieve and then dedicate yourself to following through
each and every month. Make yourself a promise

• Make the most of your income- The belief that you

simply don’t have enough money to put towards your
goals can keep you from dealing with your financial
problems.
Try to focus on making the most of the income you do
have by spending wisely.
• Small steps are key- You may not be able to cut any
one expense by P500, but you may be able to identify
five monthly expenditures you could reduce by P100.
Forgive yourself if you slip up.
Sticking to a budget is not always easy, and there may be
days when your resolve falters.

• Reduce debt- Reducing your debt will reduce your

financial stress, so start by making a plan.