Class 9 fmm notes | Chapter 4 fmm notes | Financial Planning

           What is Financial Planning? 

In this chapter, we will discuss

1. Setting Goals

2. Analysing Information

3. Creating a Plan 

4. Implementing the Plan 

5. Monitoring and Modifying the Plan. 

What is Financial Planning? 

Planning - is the process of making plan. But when we want to achieve a financial goal, we do financial planning.In which we define goals, develop a plan to achieve them, and putting the plan into action.

Like: If you want to buy a car of 4,00,000. You should make a financial plan. You will write that how much savings you have, how much you can earn, how many expenses you can avoid for now, how much money you can borrow from your friends and family, how much money you can invest in banks or stock market etc. 

Many people make plan but why there plan is not successful? 

Now we will discuss some important factors about how to make a plan. 

1. Set Goals: In this part you should decide the goal which you want to achieve. Like : you want to score 90% in class 9th, so this is your goal. 

FOR MORE EXPLANATION, CLICK HERE(Part -1)

2. Analyse Information: In this part you will analyse the information. Like: how much syllabus you have covered or how much left, any subject in which you are facing problems, what is the date sheet of exam, etc.

3. Create a plan📝📋

Now you should make a plan. Like : you will study 8 hours a day, you will give 2 hours to mathematics, you will learn all the important questions of Social Science, you will ask your doubt etc. 

4. Implement the Plan : 

In this part you are studying mathematics for 2 hours⌛, you are learning all the important questions of Social Science. Basically you are doing the things which you wrote in your plan 📋. 

5. Monitor and Modifying the Plan : You were implementing the plan but when you saw that it is not working.Now suppose you are good at maths and not at Science then you should modify your plan and give 3 hours for science in a day. You also check ☑ that is this plan working or giving me result?

Part -2 video explanation

Part -3 video explanation

Needs 🆚 Wants

Needs are essential. 

Needs are limited. 

While wants simply increase the quality of life. 

Wants are unlimited.

What are the steps in financial planning? 

Step 1: Setting goals

Step 2: Analysing Information

Step 3: Creating a Plan

Step 4: Implementing the Plan

Step 5: Monitoring and modifying the plan. 

The goal is a destination, something you want to achieve in your life time to time. It's gives direction to your plan of action. 

Now we have a theory of SMART Goal. 

1. Specific

For example: I want to spend my Sunday at the beach.

Goal which is not specific :

I want to do something on Sunday. 

2. Measurable :

I need ₹ 50,000 to buy a scooter. 

 Unmeasurable : I need some money to buy a scooter.

3. Attainable :

For example : I want to save ₹2, 000 from my salary ₹15, 000 per month for a year for purchasing a laptop of worth ₹24000.

Unattainable : I will save rs. 12000 per month for a period of five months out of my salary of ₹10000.

Realistic: A goal which is real. 

For example : I will buy a motor bike worth of ₹60000 by saving ₹2500 per month after a period of two years. It seems realistic.

Time - bound: you must specify a particular time period in which you will achieve the goal. 

Short term :  A goal planned to achieve within a day or a week or a month or within three months. 

Intermediate term : A goal planned to achieve within a few months or within a year. 

Long term: Goal planned to achieve after a year. Long term goals are more than a year. 

If you want to know more, please watch the videos given above. 

If you have any doubt, please ask in the comment section.