He will weigh pros and cons of this investment with reference to the future events like education of his daughters, their marriage and his retirement plans. X has a family of 4 members (a wife and two daughters) and he wants to invest in real estate in India.

Personal Financial Planning Example-2: Let’s suppose Mr. Basically all the activities fall under the impression of personal finance. Personal finance not only involves the decision making process but also activities like budgeting, insurance, mortgage planning, savings and retirement planning. Often they are manipulated by circumstances they are misinformed about the market condition, this leads them to conclude a decision which is not as rational as it seems. Further adding to their statement, they said most of the consumers lack the sufficient information and are unable to make the most rational financial decisions for their family. Economists argued that consumers act irrationally in real life scenario. However, the question on assumption began to rise in early twentieth century. According to the theory invisible hand makes market fluctuations predictable, also it provides assurance to the consumer that the change is favor of them. It is based on the concept that everyone in a market economy will behave in their own self-interest, rationally. The invisible hand is the driving force behind most of the market theories and practices. However, recently economists argue that personal finance is indeed an integral part of macro economics. In late nineteenth century there was no term as personal finance, it was a part of home economics.

of a nation, organization, or person.” The latter one is “ Managing or science of managing money matters, credit, etc is called finance. The first one says, “ Finance is the money resources, income, etc. Webster’s Ninth New Collegiate Dictionary has two definitions of finance. Khan and Jain, define finance as the art and science of managing money. According to the Oxford dictionary, the word ‘finance’ signifies ‘management of money’. The steps involves earning, spending and saving the income by keeping an account of risks involved and future life events. Financial Planning Basics For Beginnersįinancial management of money by an individual or a family unit is known as Personal finance.Importance of Personal Financial Planning:.Example of Personal Financial Planning:.Personal Financial Planning Definition:.

Financial planning template personal