| What is Personal Financial Planning?

What is Personal Financial Planning?


The Love of Money is the Root of all Evil, but Money itself is a Necessary Part of Life

Have you every heard the expression, “The love of money is the root of all evil”? I’m sure you have and it’s very likely that you, as well as many other people thought it was, “Money is the root of all evil”.

The fact is, despite the problems money can get us into, we still need it in order to survive. We need money to buy food, shelter, insurance, transportation, and the things that we desire. It’s the love of money that gets us into trouble. Trouble can be debt because we love money so much that we spend more than we have, and trouble can be obsessing over getting rich and destroying all other aspects of our lives.

Money is Complex and Needs to be Treated as Complex

We don’t take Finance in Elementary School, Middle School, or High School. We learn about Math, Science, History, and English, but there is very little to no emphasis placed on money aside from a semester of Economics. Nearly 100% of the burden of teaching money management skills is on our parents, and they don’t often do a good job.

At some point in our lives we must learn that money is complex and involved, or else we will never truly understand it and be able to live without financial trouble or worry. We need to learn how to manage our money.

What is Personal Financial Planning?

Personal financial planning is a way of organizing our money, and creating and planning financial goals. These may goals include:

  • Providing for daily living expenses.
  • Eliminating debt.
  • Supporting our children throughout life and parents as they age.
  • Sending our children to college.
  • Building retirement savings.
  • Buying a house and/or car.
  • Vacations.
  • Any expense we are building toward in our life.

Our finances include the money we take in, also known as cash inflows, and the money we spend known as cash outflows. The goal is to plan how much you spend based on how much you make. Any money that is extra is known as our net cash flows and is what we must use to fund our financial goals. Financial planning also includes how we invest our money to make it grow.

I’m not an Accountant or Financial Adviser; I don’t think I can do this!

It’s true, accountants and finance professionals will know more about money and finance because they have gone to college and spent years studying it. This doesn’t mean you can’t do it. It’s not as hard as you think!

In order to control your money, you need to be able to budget. You can make your own budget or get any kind of budget software out there such Quicken as which now has a FREE online version Quicken Online – Web-based Money Management. Or, you can find many different financial planning books about financial management to help you along the way.

If you want to get started with personal financial planning and reaching your goals, check out these articles:

Family Money Management – Financial planning in a family.

Personal Money Management – Financial planning for individuals.

Basics of Financial Planning – The Basics for getting started planning your finances.

Keys to Financial Planning – The three things you need to know when you plan your finances.

Personal Budget Planning – Develop a budget in order to help you achieve your goals.

Money Management Tools – The tools you will need to start planning and saving.

When Should you Take Financial Planning Advice? – Not everyone is an expert.

How do I Pay Off my Debt? – Don’t let debt get you down; stop it in its tracks.

Financial Planning for Retirement – Retirement is a good chunk of your life, don’t overlook it.

Setting Financial Goals – Set financial goals to work towards.

Credit Card Debt Reduction – Credit card debt plagues many people.  Find out how to get rid of it once and for all.