SCHOOL OF BUSINESS AND SOCIAL SCIENCES (SBSS)

FINANCIAL PLANNING (SBF 2013)

GROUP ASSIGNMENT

“EXECUTIVE SUMMARY”

Prepared by

Muhammad Salehuddin bin Mohd Serimenati AIU18092020

Muhd Tahir bin Ahmad AIU18092009
Siti Noralinnah Jusneh AIU18092008
Andi Nur Elisya Syahira Binti Bahri AIU18092007

Prepared for
DR. SHAHRIZA OSMAN

Due Date:

7th June 2020

INTRODUCTION

A financial plan is a document that contains a person's current financial situation and
long-term, short-term, medium-term goals and strategies for achieving that goal. Financial
plans can be created independently or with the help of a certified financial planner (Kagan,
2020). By planning financially, an individual is able to avoid excessive spending, unmanaged
debt, bankruptcy or dependence on others. Individuals peace of mind because they are able to
manage everything easily and efficiently. In addition, financial planning can also strengthen
personal relationships with people around you, such as family, friends and co-workers because
you enjoy your life and do not need to borrow money to meet the needs or expectations of
others. Individuals will also be free of financial problems as they plan for the future, anticipate
spending and achieve personal goals and can be more effective in securing, utilizing and
protecting your financial resources throughout life, not for themselves but for the people they
love. In other words, when someone has a personalized financial plan, you are more aware of
your future needs and resources. In addition, having a good financial plan can give the
individual peace of mind as they can manage everything easily and efficiently. For example,
our group laid out our goal of financial planning to buy a one unit house worth RM 200,000.00
for the next 12 years. To achieve this our group need to provide a detailed financial planning
such as the provision of a full savings and investment.

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MONEY MANAGEMENT

Managing money is the process of budgeting, saving, investing, spending or otherwise

supervising an individual or group's cash use. In financial markets, the predominant use of the
phrase is that of an investment professional making investment decisions for large pools of
funds, such as mutual funds or pension plans. It is often referred to as "managing savings" and
or "managing portfolios". While the term is normally used with reference to professional
money managers, with their personal finances, everyone practices some form of investment
management. There is a wide range of money management services, from the operation of
passively-managed, low-fee mutual funds to in-depth estate planning and consultancy. (The
Investopedia, 2012).

Money management does not end each month, and the next month starts again. So to
keep a better picture of our money, we can also use Online Money Management Software to
help us enter all of our cash transactions smoothly (thefreelibrary.com, 2012). It's as important
as earning money on its own and helping us make the best use of money. Identify our money,
and follow their paths. Increase our savings, and manage our income.

Life is much easier when the financial skills are good. How we spend our money is
affecting our credit score, and how much debt you end up carrying. For starters, if we struggle
with money management, we live pay check to pay check despite making more than enough
money, here are some tips for improving our financial habits. When faced with a decision to
spend, particularly a large purchase decision, don't just assume that we can afford it. Confirm
that we can really afford it, and that we have not allocated those funds to some cost already.

Have a budget. Many people do not budget because they do not want to go through
what they think is going to be a boring process of listing expenses, adding numbers, and
ensuring that everything is line-up. If we are bad with money, we have no room for budgeting
excuses. If all it takes is a few hours working a budget each month to get our expenditure on
track, why wouldn't we do it? Instead of focusing on the budget creation process, concentrate
on the importance that budgeting can add to our lives.

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 Give ourselves a limit for unbudgeted spending. A critical part of our budget is the
net income or the amount of money left after our revenue is subtracted from our expenses. We
can use it for fun and entertainment if we have any money left over, but only up to a certain
amount. With this money, we can't go crazy, especially if it is not a lot that has to last the whole
month. Make sure it does not interfere with anything else that we have planned before we make
any big purchases.

Track our spending. Small purchases here and there quickly add up, and we have
spent our budget overflowing before we know it. Start tracking our spending to spot where we
may unknowingly overspend. Save our receipts and write our expenses in an expense log,
categorizing them we will recognise places where we fail to keep our expenditures in check.

Limit our credit card purchases. Credit cards are the worst enemy to a bad spender.
We simply turn to our credit cards when we run out of cash, without considering whether we
can afford to pay the balance. Resist the urge to use our credit cards to make purchases that we
cannot afford, especially on items that we do not need.

Being good with money takes practice. We may not be used at first to plan ahead and
put off purchases until we are able to afford them. The more we make these habits part of our
daily lives, the easier it is to manage our money and the better it will be for our finances.

SAVINGS AND INVESTMENT PLANNING

As your income begins to increase, so does the importance of savings and investment
planning. Initially, people save to establish an emergency fund for meeting unexpected
expenses. Eventually, however, they devote greater attention to investing excess income as a
means of accumulating wealth, either for major expenditures (such as a child’s college
education) or for retirement. Individuals build wealth through savings and the subsequent
investing of funds in various investment vehicles: common or preferred stocks, government or
corporate bonds, mutual funds, real estate, and so on. The higher the returns on the investment
of excess funds, the greater wealth they accumulate (Gitman, 2011). While you’re still working,
you should be managing your finances to attain those goals you feel are important after you
retire. These might include maintaining your standard of living, extensive travel, visiting
children, frequent dining at better restaurants, and perhaps a vacation home or boat. Retirement
planning should begin long before you retire.

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 According to the Jim (2020), he addressed the statement that everyone must know at
least one way where should invest our money for our future life. This is essential because your
life is guaranty safety and wealth. He added we can achieve whatever we want it in future such
as car, jewelry and so on. He also telling the methods where to save our money. One of it is
CD or called certificate of deposit. It is common way that easy to follow and many benefits
that you will earn. The conditions is always committed to invest every month to ensure the
dividend is increase. In other way, he also highlight about Trade forex which is second side to
invest the money because you will get bonus after you trade at accurate time (Probasco, 2020).

Based on the poster we made it, we put three method in saving and investment planning
to achieve our goal in financial planning as well as in our reference book chapter 1. We made
our goal for long term goal. First one is try to approach the certificate of deposit or CDs. Like
a saving account, CDs are insured “money in the bank”. The reason why this method is
effective to in managing money because if you invest at government bank, your money will be
secured and guaranty refund the money if your money is lost from the bank. Such an example,
we decided to take ASNB (Amanah Saham Nasional Berhad) as our choice to invest money to
buy house. We take ASB Financing as effective method because dividend rate is increase by
time to time as long as we committed to invest money every month. The result is within 12
years, we able to get RM 209,018.59.

In addition, investing stock or bonds also in consideration to buy one house for future.
In case, we interested to buy stock or bonds, we will make sure the market value of the stock
or bonds remain balance and increased so that we potentially get higher return of investment.
Thus, we need to look and give attention to the market by looking the statistic fact or chart that
show inflow and outflow the percentage of ROI. We usually invest in a long term period such
as 5 years and above. However it depend on the economy crisis. If the economy is stable, then
it is good to buy stock or bonds for long term.

Choosing a Financial Planner

Planners who have completed the required course of study and earned the Certified
Financial Planner® (CFP®) or Chartered Financial Consultant (ChFC) designation are often a
better choice than the many self-proclaimed financial planners. Of course, CPAs, attorneys,
investment managers, and other professionals without such certifications in many instances do
provide sound financial planning advice. Unlike accounting and law, the field is still largely

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unregulated, and almost anyone can call himself or herself a financial planner. Most financial
planners are honest and reputable, but there have been cases of fraudulent practice.

Conclusion

The good budgeting of the income means an increase of the capital. If you can save up
a huge amount of capital, then we will be able to save up for future investment in return. This
is determined by the capital that we can save up in a month. Therefore, work closely with an
experienced financial advisor to guide you on the best investment to consider and how to go
about it. In consequence, the importance of financial planning is found in protecting the
finances you and our loved ones depend on. This protection is reflected in eliminate stress
(doubts, uncertainty, fear, etc.) of not knowing how you'll survive, knowing what you need to
do to achieve what you want, and elevate our self-esteem making you a better person capable
of discovering and achieving our life's mission.

Institution bank also play a vital role in providing financial services to ensure the money
can be controlled and secured by bank itself. It is also teach us on how to create budget plan
with giving consultation to the customer and recommended to serve us. ASB, Maybank, Cimb
bank also the best way to create saving account with providing such a kind of financial package
that suitable according to the customer budget. Lastly, the decision making on financial
planning depend on our goals what we want to achieve.

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References

Kagan, J. (2020, April 14). Understanding Financial Plans. Retrieved June 6, 2020, from
https://www.investopedia.com/terms/f/financial_plan.asp

Gitman, J. B. (2011). Personal Financial Planning. USA: South Western, Cengage Learning.

Probasco, J. (2020, June 5). Plans Can Now Invest in Equity Funds. Retrieved from
Investopedia: https://www.investopedia.com/401-k-plans-can-now-invest-in-private-equity-
funds-4846917

Castillo, J. (2017, June 28). MoneyStrands. Retrieved from 10 Essential Steps To Manage Your
Money The Right Way: 10 Essential Steps To Manage Your Money The Right Way

Wow Essay. (2019, December 12). Retrieved from Money Management Essay Examples: 10
Essential Steps To Manage Your Money The Right Way