What is Finance Planning? How to save money
Finance planning is the most important aspect of our life. Financial planning is essential for people of all ages in today’s society. As we all know that in order to live, food is needed, in the same way money is also needed. If we have money, it becomes important to keep and manage it well. So let’s know all the important aspects related to finance in sequence.
What is Finance?
Finance is called finance in Hindi. Finance means all activities related to money, such as borrowing money from someone, investing, preparing the budget. Money is the word that is associated with all the things in the world. The most important money is for us to buy anything. When money is so important to us, then why do we neglect the management of money so much?
Actually, the biggest reason for this is that we teach about earning money in our schools, colleges or universities, but do not teach how to manage money, nor do we learn any way to manage money.
Money is associated with everything, if you have money then you are respected in the world. This is the reason why any country is able to show its power in the world only when its economy is good enough, so all the countries around the world continue to work to increase the economy. The US is a living example of this, the US economy is number one in the world, so it is considered the most powerful country in the world.
Well in this blog, we will give you more and more information related to finance planning, so that you will not need anyone else for financial planning, you will be able to do finance planning on your own.
What are the types of Finance?
Before understanding Finance Planning, you should understand what types of finance are there – although there is no limit to the type of finance, but mainly, there are three types of finance- Public Finance, Corporate Finance & Personal Finance.
Now let’s understand all the finance in detail
Public finance Knowing and understanding the things related to finance is public finance. So that whatever outcome is coming from the reshuffle of government regulations in the market, it can also be known. Under this, the government has to track all activities related to money. Under this, analysis of all the income, expenses, taxation and policies of the government is included. Public Finance is divided into four major parts – Public Income, Public Expenditure, Public Debt, Financial Administration.
Corporate Finance is a form of finance that includes funding, structural set up, investment, dividend etc. All the financial things related to business such as investment, loans, etc., which have direct contact with the corporate of the country.
The money used for himself or his own money is called Personal Finance. It contains everything related to managing and handling your money. A lot of things come under this, such as household expenses, keeping track of your own earnings, spending, saving and investing. Even everything related to us and our money comes under it like- own salary, shopping, credit card, home loan, personal loan, stock market portfolio, investment, life insurance, loan, property.
There is another type of finance- Equity Finance Investment in any company for shareholding or fund given to a startup. Debt Finance It is money borrowed from an individual, institution or company. Example- Money taken from a bank on loan.
How to do Finance Planning?
In this way we came to know that what are the types of Finance? But it is not only important for us to know, it is most important to know how to plan finance? Actually, everyone’s life keeps fluctuating. So if you keep your money in advance, then it will be very beneficial for you. Let us consider this Financial Planning kernel as step to step.
There are mainly two methods of Finance Planning – Depend on an expert Decide yourself See, you will have the right account of your income and expenses. Anyway, we are the best anyone in the world can understand us. Everyone’s income and expenses are different in the world, so financial planning should be different for everyone. With this, our expenses and income are always changing, so we should keep it in perspective.
Lets understand step by step
- Understand Your Financial Status Observe your own expenses and know and understand your original financial status. Do you understand how your expenses are? To know your own financial status, you have to divide your finance into two financial statements- Net Worth Statement & Cash Flow Statement. In Net Worth Statement, collect your property, debts and liabilities. By this you will be able to understand whether you have property or not and if you are of any use or not. This means that you will get to know about your Net Property better.
- Determine the target For this also prepare a list – in which you write down all the things that you want to get in life. Write down all the things properly and also write when do you want these things in your life? Example- If you want to buy your own car and house, then you write well how long you want these things and what will be the total cost of those things? In this way, write down all the goals of your life in order, like-When you have children.
- Look at the difference between your goal and Financial Status You should look at your current state of finance and understand your goals. If you have to fulfill your goal, then you have to adopt this step. Just like if your goal is to buy Jaguar Car, but your monthly salary is only 15 thousand, then you will have to see the gap of your Financial Goal & Financial Status.
- Personal Financial Plan In this, you have to prepare a financial plan according to your goals and your financial situation. There will be many questions in your mind while making this plan. like- How much money will I have to save every month or year? How much amount to put in the emergency fund When this plan is ready, we will see the hope of a better and right path to reach our goals.
- Execute a Financial Plan See, nothing is ever done by just planning. Implementing that plan makes things happen. If you followed all the other steps but did not just follow this step, then your entire work would be meaningless for you. None of you will ever happen. So if you want to achieve your goals, then you start preparing for implementation.
- Reviewing your progress from time to time You have to implement your make plan, you will also have to review it. In the review we have to see- At what speed is our plan progressing? If you understand all these steps and implement them properly, then you will definitely never have to worry about money problems.
Why finance planning is important and how to get more information about it
Through Financial Planning, we can create and achieve our Short Term and Long Term Financial Goals. When you have your entire account ready, you will be able to rein in your expenses. If you keep the information related to finance, then you will not have to worry much in this run-of-the-mill life.
If you want more information related to Finance Planning or Finance too. So you can take classes related to Finance. These classes will be available in both Offline & Online mediums. Many courses related to finance are taught in many colleges – MBA course can also be done. Moreover, you can also read books related to it, from there you will get a lot of information.
Scope in Finance
There are some main fields related to finance, where you can easily work in these mentioned departments. Those fields are like this – Banks Investment Companies Insurance Companies Real estate According to a report, from 2016 to 2026, Finance Expert Jobs will increase by 11%.
Career opportunities in finance If you have the skill and are interested in that field, then you can definitely make a career in that field. Since all the things in the world are related to money, then you will also get the option to make a career in finance, connected to all the things of the world.
Or say you have a lot of scope to make a career in this field. Here, from small accounted posts to CEOs of large MNC companies can be made. Following the information about finance, the opportunities available in career are some such. You can make a career in communication by making skills. You can work on good posts through writing. By becoming finance experts As a public relations officer Finance Reporting can do. As Finance Analyst As Finance Problem Solver As a communication technologist Management related work Commercial data expert.
What is the difference between Finance and Economy?
Not many people among us understand the difference between Finance and Economy, so let’s also understand the difference between these two. Economy is in a way an entire area related to production, distribution and trade. Finance is a part of it. Economy can be increased through finance. Within the economy comes the performance of countries, regions and markets.
Finance Tips Never buy things with borrowed money nor start a business. Always keep your retirement fund and emergency fund separate.