ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Saving and investing according to a financial plan instils a greater sense of purpose in your journey for financial well-being and financial independence in the long term. The most important aspect of a good financial plan is goal linkage with investments.

Detailed explanation-2: -Budgeting and saving goals within a financial plan In this case, budgeting and saving are the critical factors. You can’t build wealth without having a handle on your expenses and knowing what you can save.

Detailed explanation-3: -Financial planning is a step-by-step approach to meet one’s life goals. A financial plan acts as a guide as you go through life’s journey. Essentially, it helps you be in control of your income, expenses and investments such that you can manage your money and achieve your goals.

Detailed explanation-4: -It relates to the odds of money loss. In case of a financial risk, there is a possibility that a company’s cash flow might prove insufficient to satisfy its obligations. Some common financial risks are credit, operational, foreign investment, legal, equity, and liquidity risks.