Many people underestimate the power of personal financial planning. In 2012, the Household Financial Planning Survey by the Certified Financial Planner Board of Standards reported that less than one-third of family financial decision-makers have made a comprehensive financial plan. The same survey showed positive benefits for those who did have financial plans, including a high level of confidence about their finances and feeling like they were living comfortably.
In addition to studying business topics, students in an online Master of Business Administration with a Concentration in Finance program also learn how to create their own personal financial plans. Financial plans are helpful for people of all income levels as a way to help get personal finances in order and ensure financial growth and security.
The Importance of Personal Financial Planning
Creating a personal financial plan is beneficial for MBA students of any age. Having a plan in place as early as possible can get you on the right track and help you avoid potential mistakes. The earlier you start saving for things like retirement, the more time your investments have to grow.
A personal financial plan can help with the following:
- Organizing your finances.
- Defining realistic financial goals.
- Clarifying cash flow and spending trends.
- Revealing current mistakes you might be making.
- Demonstrating actionable steps towards meeting your goals within a certain time frame.
- Identifying potential risks to your financial security.
- Aligning your assets and investments with your financial goals.
- Estate planning.
- Growing your overall wealth.
Businesses Also Use Financial Planning
The majority of an online MBA program focuses on business, but some of these lessons also apply to personal finances. Individuals and businesses both have to sustain earnings, pay taxes and monitor spending. Businesses make and use financial plans, with the same basic goal as personal plans: to define financial goals and allocate assets properly to meet those goals.
To create a financial plan, businesses rely on financial forecasts. Similar forecasts are useful in personal finances. For a business, a financial forecast gives an estimate of the revenue the business is likely to receive in the future, as well as expected expenses. For individuals, this translates to projected income and expenses. Knowing how much money you are likely to earn over a given period of time is essential for accurate financial planning.
How the Online MBA Program Helps Students With Personal Financial Planning
In addition to the business finance courses students in an MBA Finance program take, there are also courses that benefit personal finances. One course in Texas A&M University-Corpus Christi’s program, for example, concentrates exclusively on personal financial planning. Topics covered include savings, taxes, insurance, investing, planning for retirement and estate planning. Other courses go more in-depth on financial institutions, markets and investment strategies. All of these topics can play a role in personal finances.
Experts recommend individuals hire professional personal finance planners for their knowledge and expertise. Students enrolled in an MBA program gain the understanding and confidence in financial topics they need to create their own personal financial plans.
Having a financial plan means having a guide for financial stability and comfortable living. An MBA with a concentration in finance goes beyond business finance to teach students about personal financial planning for their own futures — knowledge students can rely on long after graduation.
Learn more about the TAMUCC online MBA program.
Sources:
http://www.investopedia.com/articles/pf/08/run-finances-like-business.asp
