Lesson from Finance Course
Lesson from Finance Course
This course on finance is important both in training of business professionals and in application to an individual’s personal life. Various aspects of this course including debt management, income tax, personal finance and investment, the role of insurance, filing bankruptcy and retirement and estate planning are applicable in real life and are vital in planning and management of personal finance. Most of these topics did not pose difficulty grasping. I particularly found courses including management of personal finance, debt management and income tax very useful. Topics I found a little complex include the role of insurance in personal finance and retirement and estate planning. I however keep looking at these topics to grasp more and to relate them to personal finance.
The course on management of personal finance through the development of a personal financial/ investment plan to me was the most practical and easily applied lesson in this course. This is because the lesson entailed the development of an investment plan based on a budget. This lesson incorporated relatable aspects of finance. I can easily develop my own investment plan using the investment plan I developed in this lesson as a prototype. Each of the steps in the development of a personal investment plan are practical and applicable in my actual financial situation.
Developing an investment plan can enable me to asses my current financial situation, to live within my means, to allocate funds to meet various expenses, to identify financial priorities, to meet financial emergencies, to achieve financial independence and control and to save and invest to attain financial goals. Another importance of having an investment plan is that it can enable me to attain financial security, to review it from time to time, and to make adjustments where necessary, based on my level of income. Through the development of an investment plan, I can assess my financial situation and know my net worth by assessing my finances in terms of assets including personal property, cash and cash equivalents and invested assets, and in terms of liabilities, which include my current bills and my outstanding debt. I can establish financial goals based on my financial situation, in categories of short, intermediate and long term financial goals. Income tax, savings and retirement are important aspects of the investment plan that will enable me safeguard my finances for future financial stability.
The lesson on the role of insurance in personal finance was the most difficult to grasp. It was difficult to establish the position of the insurer in personal finances, especially in small finances and in cases when the individual can only afford to pay for very few and only the most essential insurance premiums. My understanding of the role of insurance came in only when insured property or life was damaged or needed compensation. The complexity in the position of insurance especially when an individual files bankruptcy was confusing and difficult to understand. The double role played by insurers in bankruptcy further increases the complexity of this subject.
The lesson on the role of insurance was difficult to grasp probably because I have not had much exposure to the field of insurance in the past. My inability to relate to the role of insurers in personal financial management is probably because of the minimal interaction I have had with the insurer apart from the regular insurance premiums I pay for. The fact that insurance premiums form part of a personal budget, is a key aspect of personal finances and is important in personal finance management, there is need to find out more about the role of insurance in personal finance and to relate it to real life and its applicability.
Missouri State University. (2015). Creating a Personal Financial Plan. Retrieved from https://www.missouristate.edu