Topic 5: Financial Planning Flashcards Preview

Finance > Topic 5: Financial Planning > Flashcards

Flashcards in Topic 5: Financial Planning Deck (9):
1

What are the purposes of financial planning

Life events - car, house, children
Retirement- Pension is sufficient
Death - Inheritance tax and possessions are catered for

2

What can planning be dependent on

Family, finance, lifestyle, personality and attitude to risk

3

Give examples of positive and negative unexpected financial events

P - Winning the lottery, promotion
N - Illness, redundancy, stolen property

4

What 5 things must a financial plan be?

Timely
Flexible
Documented
Realistic
Clear

5

What's a budget

Personal financial plan drawn up each month. Income and expenses

6

Whats a cash flow forecast

A budget for the whole year

7

Where do you start when planning a budget or forecast?

Balance of accounts, income, assets - liability, insurance, expenditure

8

What's a financial health check?

HSBC use this to create a picture of a person's current financial position - their credit rating

9

What are the consequences of failing to plan

Unlikely to achieve wants and needs
Low credit rating
May come into debt
No pension later in life