Financial Planning: Budgeting, Retirement, and Personal Goals Analysis

This assignment presents a comprehensive analysis of personal finance, focusing on budgeting, retirement planning, and the establishment of financial goals. The student begins by utilizing personal balance sheets and cash flow statements to assess their current financial standing, emphasizing the importance of these tools in understanding assets, liabilities, and cash flow dynamics. The budgeting process is detailed, highlighting its role in forecasting income and expenses, controlling financial performance, and making informed financial decisions. The assignment also covers retirement planning, including goal setting, budget allocation for essential and non-essential expenses, and the application of behavioral finance principles to avoid common pitfalls in decision-making. The student reflects on how to avoid biases and improve long-term financial strategies. The assignment includes references to academic literature to support the financial concepts discussed. This assignment is a great resource for students to understand how to manage their finances.

Budgeting Worksheet Narration
The personal balance sheet is one of the types of personal financial statements where I learned
that it offers an entire screenshot of my wealth for a particular time period (Pavlović, Miloš, and
Jovan 129-147). It acts as a summary of my assets and the liabilities I have along with
determining my net worth also. With the personal balance sheet, the cash flow statements were
also quite helpful for me as it helped me in presenting the cash inflow and outflows of my wealth
for a specific period of time. It was equally and significantly important as the personal balance
sheet was for analyzing the cash flows (Reid, Walter, and Myddelton 16). The cash flow
statements provide me with the information regarding my cash payments, cash receipts and the
total change in the cash arising from my investments and financial activities during all this time.
I also get to learn that the budgeting process was a lot helpful for me to forecast my expenditures
and my incomes and also helped me to make the decision for the same. It also acts as a means to
control and handle my financial performance as it was the process by which I was able to
develop my budget according to my income and expenses (Hope 71). I get to know that an
effective process of budgeting involves that individual who is held accountable for sticking to the
budget and hence implement it so as to create a budget for future. A good process of budgeting
includes initiatives for strategic planning and also facilitates that the income will be budgeted
before the expenditures. It has also helped me to obtain an ability to have continuous
improvement and further anticipate the problems by improving my focus and clarity regarding
budgets. Along with this it also provides me great confidence to take the decisions on budgeting
in an effective and proficient way.
This task has helped me to become an effective money manager as after performing this task I
am now able to build budgets, save, invest, spend and make use of my capital in a very effective
and profitable manner (Bierman , Harold, and Seymour ,2012). Now after being a good money
manager rather than myself, I am now capable of helping others too, in taking decisions
regarding mutual funds, the pool of funds or pension plans.
Retirement Worksheet Narration
The very first step in my retirement planning process was to determine my goals for the plan.
Taking into consideration all my financial aspects and studying the market there. My goal is to
be a moderate investor where I want a balance in both risk and return and is aiming to get the

whole amount of money in the end and not in instalments after my retirement. Further, I break
down my retirement budget into three parts including the essentials I will require such as
clothing, house, food. Next was regarding the non-essential obligations monthly and the required
expenses which are not on a monthly basis but are somehow important for one (Merton and
Robert 43-50).
The Behavioral finance is the study which helps individual take decisions regarding money. It is
basically a social science which is concerned with the emotions, biases and blind spots rule out
one’s way of making decisions (Hirshleifer and David 133-159). The behaviour of the one
planning for retirement deviates from reasons and logic, and then they present various
behaviours which affect their process of decision making.
One of the common blind spots in taking a decision is the resistance to take up the losses and the
profits in consideration. In this blind spot, the people continue to invest and put money in the
stocks which are failing as they have put so much of emotions and energy into it. In order to
avoid this blind spot and be on track I will be selling or giving up on my bad stocks so that I
make no further bear losses on it (Halevy, Nir, and Eileen 56). Another blind spot is to make
plans but not taking the initiative to implement or execute that plan. So as for avoiding this and
bring the plan into action, I will be using a mechanism which automatically fulfils my goals
without having me to put more efforts on it. Next is the short-term focus where investors put
more focus on events closer to them and give less emphasis to events a little away from them.
For being back on track, I will be focusing on long-term goals and not let short-term issues
distract me so as to fulfil all my long-term goals such as retirement.

References
Bierman Jr, Harold, and Seymour Smidt. The capital budgeting decision: economic analysis of
investment projects. Routledge, 2012.
Halevy, Nir, and Eileen Y. Chou. "How decisions happen: Focal points and blind spots in
interdependent decision making." Journal of personality and social psychology 106.3 (2014):
398.
Hargrove, David S. "Literature and Emotion." Psyccritiques 56.49 (2011).
Hirshleifer, David. "Behavioral finance." Annual Review of Financial Economics 7 (2015): 133-
159.
Hope, Jeremy, and Robin Fraser. "the Budget." Budgetierung im Umbruch? 1 (2013): 71.
Merton, Robert C. "The crisis in retirement planning." Harvard Business Review 92.7/8 (2014):
43-50.
Pavlović, Miloš, and Jovan Bogdanović. "Cash flow statement." Škola biznisa 3-4 (2013): 129-
147.
Reid, Walter, and D. R. Myddelton. "Cash flow statement." The Meaning of Company Accounts.
Routledge, 2017. 16-16.