What Are The Main Elements Of Every Decisions We Make? - Fixanswer

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What are the main components of personal financial planning quizlet?

obtaining. you obtain financial resources form employment, investments, or ownership of a business. ...
planning. planned spending through budgeting is the key to achieving goals and future financial security.
saving. ...
borrowing. ...
spending. ...
managing risk. ...
investing. ...
retirement and estate planning.

What are some risks associated with financial decisions?

Credit risk, liquidity risk, asset-backed risk, foreign investment risk, equity risk, and currency risk are all common forms of financial risk.

What are the 3 types of risk?

Risk and Types of Risks:

Widely, risks can be classified into three types: Business Risk, Non-Business Risk, and Financial Risk .

What are the 4 types of risk?

There are many ways to categorize a company’s financial risks. One approach for this is provided by separating financial risk into four broad categories: market risk, credit risk, liquidity risk, and operational risk .

What are the 7 components of financial planning?

Your financial plan should include seven key elements (which we will cover in more detail below): your profit and loss statement, operating income, cash flow statement, balance sheet, revenue projection, personnel plan , as well as your business ratios and break-even analysis.

What are the 5 areas of personal finance?

#Number 1: Saving.
#Number 2: Investing.
#Number 3: Financial protection.
#Number 4: Tax Saving.
#Number 5: Retirement planning:

What are the five steps in the personal financial planning process?

Step 1 – Defining and agreeing your financial objectives and goals. ...
Step 2 – Gathering your financial and personal information. ...
Step 3 – Analysing your financial and personal information. ...
Step 4 – Development and presentation of the financial plan.

What are the four situational influences for financial decisions?

Personal circumstances that influence financial thinking include family structure, health, career choice, and age . Family structure and health affect income needs and risk tolerance. Career choice affects income and wealth or asset accumulation.

How do you best define personal financial planning?

The BEST definition of personal financial planning is. a process of mapping decisions for spending, borrowing, and saving and investing in order to achieve financial goals .

What is the first step of the financial planning process?

Review Of Current Financial Situation

The first step in the financial planning process involves taking a detailed look into a person’s current financial situation . This means examining a person’s savings, income, debts and current living expenses.

What are some common actions taken to achieve financial goals?

Create and stick to a budget. ...
Build up an emergency fund. ...
Get out of debt. ...
Live on less than you make. ...
Spend less and save more. ...
Save money to pay cash for big items. ...
Stop living paycheck to paycheck. ...
Pay off your home.

What types of decisions are involved in a personal financial plan?

Budgeting and tax planning.
Managing your liquidity.
Financing your large purchases.
Protecting your assets and income (insurance)
Investing your money.
Planning your retirement and estate.

Why should you reevaluate your actions after making a personal financial decisions?

Why should you reevaluate your actions after making a personal financial decision? Personal, social, and economic factors are always changing . It is important to keep you finances in line with these changes by assessing your financial decisions at least once a year. What are some examples of long-term goals?