Page 7 - PR Communication Age January 2016

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2. Objectives of individual's Financial
Planning:

People may take the help of a financial planner because of
the complexity.The duty of financial planner involves the fol-
lowing:
1. Providing direction and meaning to financial decisions;

2. Allowing the person to understand how each financial
decision affects the other areas of finance; and

3. Allowing the person to adapt more easily to life
changes in order to feel more secure.

Personal financial planning is broadly defined as a process should prioritize each goal. Many financial plans fail because
of determining an individual's financial goals, purposes in these practical points are not sufficiently considered.
life and life's priorities, and after considering his resources,
risk profile and current lifestyle, to detail a balanced and
realistic plan to meet those goals. The individual's goals are
used as guideposts to map a course of action on 'what needs
to be done' to reach those goals.

Alongside the data gathering exercise, the purpose of each 3. Scope of Personal Financial Planning:
goal is to ensure that the goal is meaningful in the context
of the individual's situation. Through a process of careful Financial planning should cover all areas of the person's fi-
analysis, these goals are subjected to a reality check by nancial needs and should result in the achievement of each
considering the individual's current and future resources of the individual's goals. The scope of planning would usu-
available to achieve them. ally include the following:
1. Risk Management and Insurance Planning;
In the process, the constraints and obstacles to these goals
are noted. The information will be used later to determine 2. Managing cash flow risks through sound risk manage-
if there are sufficient resources available to get to these ment and insurance techniques;
goals, and what other things need to be considered in the
process. If the resources are insufficient or absent to meet 3. Dealing with various important Investment and Plan-
any of the goals, the particular goal will be adjusted to a ning issues like - Planning, creating and managing capi-
more realistic level or will be replaced with a new goal. tal accumulation to generate future capital and cash
flows for reinvestment and spending;
Planning often requires consideration of self-constraints in
postponing some enjoyment today for the sake of the fu- 4. Retirement Planning - Planning to ensure financial in-
ture. To be effective, the plan should consider the dependence at retirement;
individual's current lifestyle so that the 'pain' in postponing
current pleasures is bearable over the term of the plan. 5. Tax Planning - Planning for the reduction of tax liabili-
ties and the freeing-up of cash flows for other purposes;
In times where current sacrifices are involved, the plan
should help ensure that the pursuit of the goal will continue. 6. Estate Planning - Planning for the creation, accumula-
A plan should consider the importance of each goal and tion, conservation and distribution of assets;

7. Cash Flow and Liability Management - Maintaining and
enhancing personal cash flows through debt and
lifestyle management;

8. Relationship Management- Moving beyond pure prod-

"PR is performance recognition"

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