coursework

ID- - FINANCE

1-2

Financial planning contributes to short term , intermediate and long term objectives in life . Financial planning helps an individual plan his short term objective , intermediate objectives and long term objectives It is financial planning that helps an individual project and come up with the retirement package . Also financial planning assists a person to determine his intermediate objectives . This may include : relocating to a new job for the purpose of increasing the financial resources while short term financial planning assists an individual to decode which purchases are necessary and

which ones are not necessary , then how much will he save for future consumption and which type of investments are necessary to be made

Financial planning for an individual will assist in deciding which type of loans to take or which type of credit facilities to take that will assist in the creation of assets that will be for future use while others financial planning will help them save and invest . For spending it is a short term financial plan . For saving it is an intermediate term objective while for investment it is a long term objective for an individual

3

Taxes affect financial planning and there are many methods that are used in effective tax management . The best tax management method is the minimum tax possible calculation . This is where an individual considers the tax he pays and invests his money in investments that requires less tax . Such investments include stocks , treasury bills and bonds and other corporate bonds that attract less tax as compared to personal tax . This method requires constant consolidation with a tax planner to assist in decision making

4-5

There are many expenses or regular spending which ought to be eliminated for effective managing of our money

This include excessive drinking , expensive toys for our kids , expensive outings , unnecessary wastage of resources in the family . It is important to note that such expenses once eliminated there will be excess funds for investment

500 dollars a month for car payment is not appropriate for car payment depending on the purpose of the car and whether it generates income . If the car is a luxury and you are in the middle or lower class , it may be unnecessary

Secondly , the appropriate amount spent on mortgages or a saving plan for the purpose of buying a house is 500 dollars as compared to the car payment . This is because if the house will result into savings , in the family , then it is appropriate to have a house rather than a car which does not provide money savings

6-7

I know very many people who have credit cards and they have misused them . The availability of credit cards , that is credit facilities , has made many people use their finances in a manner that they have increased the debt pattern . Credit cards have made a number of my friends enter into a bottomless pit of debt which they are not able to service Therefore , credit cards should be controlled so...