Essay On Personal Financial Planning

I keep and manage my cash in running business. For instance, I am able to control the flow of the money in and out of my retail shop business. In addition, I adhere to a financial plan that requires specific allocation of cash. Already, my business acts as income generation source, but I consider other sources in case of excess cash flow (Al & Nobanee, 2019).

 

Good cash management is essential in the achievement of financial goals, for instance, it is crucial in  financial planning. That is, I am able to allocate my finances in line with my financial goals set within a period of time. In addition, cash flow manage is crucial since it comes with risk of inflation. Hence, it calls for a cash budget that accounts for cash inflow and out flow needed over predicted time period. It helps in creation of optimal cash balance that can be utilized to perform daily activities. For instance, this principle works in a way that I have to determine the risk I will be exposed to keeping certain amount of cash and the returns associated with it. In addition, it is also crucial, in investment of idle cash to earn interest in financial market platforms. In can also include taking government bonds which is regarded as the best place to keep cash money and avoid inflation. Other investment fields include real estate other than traditional banking that offers low interest rates (Prihartono & Asandimitra, 2018).

 

Al Muhairi, M., & Nobanee, H. (2019). Sustainable financial management. Available at SSRN 3472417.

 

 

Prihartono, M. R. D., & Asandimitra, N. (2018). Analysis factors influencing financial management behaviour. International Journal of Academic Research in Business and Social Sciences, 8(8), 308-326.