Financial Planning

Financial Planning

Introduction

Financial planning is an essential element in individuals' life. It is not limited to wealthy and rich people only. Every individual has right to feel safe and secure financially for rainy days and unpredicted events in life. The financial planner is one who follows and implements a systematic procedure to manage one's financial matters and work to help them in achieving their financial goals. The given case study regarding Bedos family highlights their financial goals and plans that are managed by a team of financial managers that are hired for allocating the financial resources or savings of both Tyler and Mia in an adequate way such as investing in a variety of equity securities, cash and equitant resources, bonds, and miscellaneous funds to earn an appropriate rate of return until their retirement. Furthermore they are responsible for evaluating the correct amount of taxes and other deductions to determine the accurate sum of savings and allocate the funds accordingly so that their financial goals and concerns are met within time.

There are six basic steps involved in financial planning, which are identifying or defining the financial goals of individuals. Developing financial strategies and plan to attain those goals, implementing the respective financial plans and strategies, developing and revising the implemented or allocated sum of money towards a certain goal to overseeing the process, preparing mini financial statements such as income statement and balance sheet of clients assess the results and allocated resources and implementing counteractive actions accordingly, and finally revaluing financial goals and respective strategies depending on the changing needs of clients and economic conditions (Gitman, L J., 2013).

Discussion

The case study revolves around Bedos family that is consisting of three family members in total, Tyler, Mia and Becky. Tyler and Mia both decided to consult a financial planner as a result of terrifying events happened to their family friends that got ruined due to sudden deaths and poor financial resources. Both Tyler and Mia are of 42 age and plan to retire at the age of 62. The firm assumes that they both have a life expectancy of 95 years. Tyler works in Golf association and earns 68467 annually and Mia works in Career counseling firm and earns 32496 yearly. Tyler receives a bonus of 50% of gross income every year where as Mia does not have any. The annuals alary of both the couple increases by 3%. However, the total taxable income of Tyler is 106870, and Mia is 32496.

The family has usual expenses like many others in USA. The income of both of the partners after deducting the employer provident fund benefits is 128108. The total estimated taxes to be deducted are 39450, the expenses of debt servicing are 23568, insurance premium paid are 5239, and savings and investment totaled to be 13800. Therefore the income available for discretionary expenses is estimated to be 46051.

The financial goals of both of the partners are opening up an art gallery at home and down town, which will ...