1 CBA FM-PE | Group 1

FINANCIAL
HEALTH &
PLANNING
6 SEPT 2022
FINANCIAL
HEALTH
Financial health is described as the state of
your current financial status. Your financial
health varies from good to bad depending on
your savings, income and investments.
 It controls the possibility of
1 having no cash position for
Before we start learning, let's expenditures.
answer this question: Allows us to monitor spending
habits, manage income

WHY DO WE 2 effectively, and allocate the

right budget for needs, savings,

NEED TO and daily expenses.

PLAN?
Investing in insurance also adds
protection to an individual,
3
granting him instant access to
funds in case of unprecedented
situations.
IMPORTANCE
Moreover, good financial planning can help in
constantly adding to one's savings if
implemented right, thus achieving financial
goals and building up emergency funds.

It can also help to determine the level of cash

flow it can generate over time by forecasting
the expenses for needs, tracking returns, and
monitoring your cash flows overall.
BENEFITS
Helps in achieving financial targets or goals.
Keeps them ready for any emergency
encounters.
Enables one to manage the finances in a
responsible way and be prepared for the
future.
Make necessary improvements during a
crisis.
GUIDE ON HOW TO
MEASURE FINANCIAL
HEALTH
A person's financial situation can be evaluated in a
variety of ways, as financial health is not a static figure.
It varies according to a person's assets, liquidity, and
fluctuating prices for products and services.
Savings
overall net worth
Credit cards
mortgages
vehicle and school loans
FUNDAMENTAL ELEMENTS
OF MEASURING
FINANCIAL HEALTH
Financial Net Worth
Credit score or history
Good debt or bad debt

Savings
Investment Knowledge
Insurance Knowledge
 GOOD SIGN OF
FINANCIAL HEALTH
Strong returns on investments made in
the past, a growing cash balance, and a
tendency for costs to remain relatively
stable are all typical indicators of sound
financial health.
BAD SIGNS
OF FINANCIAL
HEALTH
No planning/No goal
Overspending
Overuse of consumer credit
Delay retirement planning
Bad decisions influenced by
emotions
Focusing too much on money
FINANCIAL
PLANNING
Personal finance is all about how you manage
your money and plan for your future.
This involves making a financial plan and
budgeting what you have to meet your needs
without lacking in funds.
FINANCIAL
PLANNING
Properly planning and allocating for future expenses
allows you to reduce unnecessary spending and can
help build mindful spending habits instead of getting
shocked on how much money you have left.
 A Identify your net worth and
personal budget.
Steps and guide on making a plan: B Manage lifestyle inflation.

HOW DO YOU C Recognize needs vs.

MAKE A
wants.
D Start saving early.
FINANCIAL
PLAN?
E Build and maintain an
emergency fund.
 NET WORTH &
PERSONAL BUDGET

BUDGETING NET WORTH

Involves making projections for income
and expenses.
After projections, you subtract expenses
from income to see how much money you
can use for other purposes.
Assets - Liabilities = Net Worth
What you own minus what you owe.
Represents where you are financially
at that moment.
Tracking your net worth allows you to
evaluate your financial health.
LIFESTYLE
INFLATION
Managing lifestyle inflation simply means that
you evaluate which costs are truly needed and
which you can go without.

Examples:
Needing to dress appropriately for a job
position, needing a helper due to workload.
 NEEDS
Needs should be a top priority in your
personal budget as it covers things

VS
you can't live without.

WANTS
You can allocate funds for wants only
after needs are met and is only optional.
START
SAVING EARLY
Because of compounding interest, the future
value of money invested in savings now has a
much higher value in the future than in the
present.
It's better to choose a bank that offers an
interest rate that beats or is in close par with
inflation rates to end up with gains rather than
losses.
 MAINTAIN AN
EMERGENCY FUND
Intended for situations that may unexpectedly
arise (i.e. accidents, car repairs, disease/virus).
Emergency funds can also help pay regular
expenses if income is interrupted.
THANK YOU!