2
- Introduction
Financial planning and forecasting play pivotal roles in steering an
individual's or organization's financial stability and success.
In
general usage, a financial plan is a comprehensive evaluation of an
individual's current pay and future financial state by using current known variables
to predict future income, asset values and withdrawal plans. This often includes a
budget which organizes an individual's finances and sometimes includes a series of
steps or specific goals for spending and saving in the future.
This plan allocates
future income to various types of expenses, such as rent or utilities, and reserves
some income for short-term and long-term savings.
A financial plan can focus on other specific
areas such as risk management,
estates, college, or retirement.
Financial Planning:
Financial planning involves creating a roadmap to achieve economic objectives,
including managing income, expenses, investments, and assets to achieve short- and
long-term financial goals.
Financial Forecasting:
Financial forecasting involves predicting future financial performance based on
historical data, current market conditions, and anticipated trends. It
aims to provide
insights into decision-making and planning.
