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PFIN 5th Edition by Randall Billingsley,Lawrence Gitman,Michael Joehnk
Edition 5ISBN: 978-1305661707PFIN 5th Edition by Randall Billingsley,Lawrence Gitman,Michael Joehnk
Edition 5ISBN: 978-1305661707 Exercise 2
Personal Financial Goals and the Life Cycle. Use Worksheet 1.1. Fill out Worksheet 1.1, "summary of personal Financial goals," with goals reflecting your current situation and your expected life situation in 5 and 10 years. Discuss the reasons for the changes in your goals and how you'll need to adapt your financial plans as a result.
Explanation
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Personal financial goal is a set of expenditures and payments to be made during the period of generally ten years. It helps to determine the amount of fund required for different purposes during the period of ten years. Personal financial goals are classified under three heads:
1. Short term goals (for the period of one year or less than one year)
2. Intermediate goals (for the period of two to five years)
3. Long term goals (for the period of six years or more)
The financial goals might be changed due to the following reasons:
• Inflation : Inflation will increase the price of goods and services, therefore the financial goals will be affected.
• Contingencies : Any contingent or unexpected situation will affect the financial goal set by an individual.
• Natural calamities : The occurrence of natural calamities will disrupt the financial goal.
• Prolonged illness : The heavy expenditure on illness of a person or his family members will affect the amount set for financial goals and the person will require more funds.
1. Short term goals (for the period of one year or less than one year)
2. Intermediate goals (for the period of two to five years)
3. Long term goals (for the period of six years or more)
The financial goals might be changed due to the following reasons:
• Inflation : Inflation will increase the price of goods and services, therefore the financial goals will be affected.
• Contingencies : Any contingent or unexpected situation will affect the financial goal set by an individual.
• Natural calamities : The occurrence of natural calamities will disrupt the financial goal.
• Prolonged illness : The heavy expenditure on illness of a person or his family members will affect the amount set for financial goals and the person will require more funds.
PFIN 5th Edition by Randall Billingsley,Lawrence Gitman,Michael Joehnk
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