Personal Financial Planning


Personal Financial Planning is a very important part of people’s life. It is not a secret that every plant, factory, and other financial organizations have their financial planning departments. Family is also a financial organization, and which budget needs planning. We are not going to speak about week or month planning; our task is to give the reader an understanding of the long-term period.

Main body

The book “Personal Financial Planning” by Gitman and Joehnk and the article “Providing for oneself in retirement” by Kota Kinabalu give the reader some hints and explaining of how and what planning is necessary. These two sources give the same idea that personal financing planning should be used in every family as this planning can improve the current life and help to save some funds for future retirement.

Kota Kinabalu in his article says that Chief Executive Officer of Professional Investment Services Group, Robert J Bennetts from Australia said that it would be a good idea for governments to revert the responsibility of retirement to the individuals. (2007) He says that such changes will be very good for the country’s economy. The earlier people start to save, invest and plan money for their future needs, the better result they could see when the time of retirement will come. (Kinabalu 2007)

Gitman and Joehnk in their book represent the reader with idea that the changing political, social, economic, and technological environment dictates some new rules in personal financing planning. (2007)

Personal financing planning can allow us to control our financial operations. Without this planning, people can’t leave some financial funs for the future. To make good financial decisions people should follow all their incomes and expenses they provide.

All people want to live a wealthy life, with high living standards. But still, the financial plan cannot be universal as different people have different standards of living, and these standards depend on the financial incomes of people.

The financial abilities of people, people’s desires of what they would like to achieve in their life should be taken as a starting point for developing a financial plan. The plan should not only have the goal to leave as much money fur the future as possible but to take into consideration the goals, which people want to achieve now, let it be buying a new board or going for a vacation. (Kinabalu 2007)

Personal financing planning plays a great part in defining the wealth abilities of people and in the help for them to direct the extra financial sources to the most productive spheres.

Some people look for ways to get extra money and to leave them for the future. People name such extra sources of income as investing in real estate, inherent money, get a professional degree, start a business or invest in stock. (Gitman and Joehnk 2007)

To create a good personal financial plan, people should set aside a portion of current income for deferred, or future, spending”. (Gitman and Joehnk 2007) To increase the financial income in retirement, people should place their money in some savings and investment vehicles. This procedure will allow people to use their money in the future with some percent.

As it was said above, personal financial planning should be started as earlier as possible, because in some years a person may conclude that it is too late to start the planning. But some people think that it is never late to start planning, as it may help to improve their financial position at that current moment.

It is not a secret that the two biggest constraints from the personal financing planning perspective are taxation and regulation. Inside the financial planning, people should create tax planning. “Tax planning involves the use of various investment vehicles, retirement programs, and estate distribution procedures to reduce, shift, and defer taxes. People may use different computerized plans to reduce their taxes. (Gitman and Joehnk 2007)

But before trying to reduce taxes person should study all laws and principles according to which the tax system works. The unknowing of some tax modification principles may lead to serious mistakes not only in the tax planning but in the whole personal financial planning as these two plans are closely connected.

All financial operations should be noted in the personal financial plan. The changes should be cited very carefully, as every change of income and expenses can lead to mistakes in the planning, and as result, a person can have some misunderstanding of the planned and real financial business.

So, personal financing planning is very important in the life of every modern family. This planning allows people to follow their incomes and expenses and to make some savings for future life and retirement. The part of tax planning is very important in the whole personal financial plan, as taxes in one of the expensive parts of people’s life. Personal financing planning can give people some ideas about extra money earnings and direct their attention to unnecessary expenses.

Works Cited

Gitman, Lawrence. Joehnk, Michael D. Personal Financial Planning. South-Western College Pub, 2007.

Kinabalu, Kota. “Providing for oneself in retirement” Daily express, 2007, Web.

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Premium Papers. (2021) 'Personal Financial Planning'. 17 November.


Premium Papers. 2021. "Personal Financial Planning." November 17, 2021.

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Premium Papers. "Personal Financial Planning." November 17, 2021.