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Financial Management: is the process of planning, organizing, controlling and monitoring financial resources with a view to achieve one’s goals and objectives

The process includes four distinct steps, as follows:

  • Information gathering (i.e., life goals, assets, liabilities, cash inflows and outflows, investment preferences, etc.) and analysis

  • Plan development; aligning resources to short- and long-term goals

  • Plan implementation

  • Plan monitoring, periodic review and adjustment

Foundation principles of Finance

  • Organize Your Finances

  • Spend Less Than You Earn

  • Put Your Money to Work

  • Limit Debt to Income-Producing Assets

  • Continuously Educate Yourself

  • Understand Risk

  • Diversification Is Not Just for Investments

  • Maximize Your Employment Benefits

  • Comply with Tax obligations

  • Plan for the Unexpected (risk management)

Elements of Financial Management

Economic considerations

  • Insurance

  • Financial budgeting

  • Investments appraisal

  • Local and foreign obligations

  • Tax matters

  • Income management (Liquid assets-cash)

  • Retirement planning

The Financial Planning Process

Benefits and impact of financial planning
  • Financial Planning helps you take a 'big picture' look at your financial position

  • It guides you to examine your current financial status and determine objectives.

  • It helps in devising a strategy or plan for how you can meet your goals given your current situation and future plans.

  • It also identifies weaknesses and recommends improvements.

  • It puts in place the risk management system to meet uncertainties of life through efficient Retirement Planning, Insurance Planning, Tax Planning and Estate planning

  • It helps you prepare for immediate and future needs or unexpected life events

How can we achieve Savings, reduce expenses, multiply Income Sources?
  • Tackle High-Interest Debt First

  • Cut Down Your Biggest Expenses

  • Start a Side Hustle (business)

  • Keep Your Budget Lean

  • Eliminate or reduce unhelpful social habits

  • Cost reduction