Page 576 - Introduction to Business

550 PART 5 Finance

essential for a couple to remain close; good financial planning will enable you to
spend more time together as a married couple without worrying about finances. A
major cause of marital problems is disagreement over money; not necessarily the
lack of it, but how it is spent. If you are married, spend time with your spouse dis-
cussing financial goals and objectives.
Personal financial planning revolves around your entire family. You must teach
your children about money and consult older children when making financial deci-
sions that have an impact on them, such as how much you can afford to contribute
toward their college expenses.
reality What do you want to do with the money you make?
CH ECK

Careers in Personal Financial Planning

Accounting professionals are frequently involved in providing financial planning
services to business firms and individuals. The American Institute of CPAs has
established a credential for CPAs who specialize in personal financial planning
(PFP). The Personal Financial Specialist (PFS) credential only is granted to CPAs
with significant PFP experience who want to demonstrate their knowledge, skill,
and experience by earning this exclusive credential.
CPAs should obtain the PFS credential if they are involved in PFP services for the
following reasons. First, the PFS credential enhances the CPA’s image as a compe-
tent and trustworthy financial advisor. Second, the PFS credential engenders a
greater level of confidence from current and potential clients. Third, the PFS cre-
dential shows commitment to continuously improving PFP skills and expertise,
resulting in increased professional competency. Fourth, the PFS credential makes
the CPA a member of a community of CPA financial planners with related interests
and practices. Last, the PFS credential meets the minimum competency require-
ment in almost all states for becoming a Registered Investment Advisor.

Summary

LEARNING OBJECTIVE 1 worth, how to set financial objectives, how to evaluate
Explain the purpose of personal financial planning. spending patterns, how to identify your stage in life,
and from whom to seek expert advice.
Personal financial planning enables you to meet current
and future financial needs by a combination of effective LEARNING OBJECTIVE 3
planning and implementation of those plans. Describe the budgeting process.
Americans spend much of their lives earning money,
but they rarely spend any time planning how to use Managing income requires planning and controlling
their accumulated wealth. Developing financial the use of your financial resources so that you can meet
planning skills and good spending habits at an early age current and future financial needs. Managing income
will pay huge dividends in later years. includes budgeting, checkbook management, use of
financial planning software, locating information on
LEARNING OBJECTIVE 2 the Web, and acquiring appropriate insurance.
Define concepts such as net worth.
LEARNING OBJECTIVE 4
Personal financial planning requires some fundamental Explain the key considerations in deciding to live on
knowledge. Key concepts include how to compute net one income.

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