Ideally, personal finance is a process of management and planning that anticipates or keeps abreast with changes. Needs, desires, values, and priorities all change over a lifetime, and financial concerns change accordingly. Along with career choices, all these changes affect personal financial management and planning. Over time they may choose to change careers, develop additional sources of concurrent income, move between employment and self-employment, or become unemployed or reemployed. Most people begin their independent financial lives by selling their labor to create an income by working. For example, the careers of most athletes end before middle age, have higher risk of injury, and command steady, higher-than-average incomes, while the careers of most sales representatives last longer with greater risk of unpredictable income fluctuations.
Creating a personal budget i khan academy professional#
Thus, your financial planning will reflect the realities of being a postal worker, professional athlete, commissioned sales representative, corporate lawyer, freelance photographer, librarian, building contractor, tax preparer, professor, Web site designer, and so on.
Careers have different hours, pay, benefits, risk factors, and patterns of advancement over time. Your career choices affect your financial planning, especially through educational requirements, income potential, and characteristics of the occupation or profession you choose. An example is a life insurance policy naming a spouse or dependents as beneficiaries. People often seek protection for their income or assets even past their own lifetimes to ensure the continued well-being of partners and dependents. Typically, both the willingness and ability to assume risk diminishes with dependents, and a desire for more financial protection grows. Being responsible for others also affects your attitudes toward and tolerance of risk. Providing for others increases income needs. Parents typically want to protect or improve the quality of life for their children and may choose to limit their own fulfillment to achieve that end. Partners and dependents affect your financial planning as you seek to provide for them, such as paying for children’s education. You may expect the dependence of a family member to end at some point, as with children or elderly parents, or you may have lifelong responsibilities to and for another person. If you have a spouse or dependents, you have a financial responsibility to someone else, and that includes a responsibility to include them in your financial thinking.
Marital status and dependents, such as children, parents, or siblings, determine whether you are planning only for yourself or for others as well.
0 kommentar(er)
