Personal Finance
Ece Yavuzbaş
Gökçe Uz
Tevfik Kumru
Kemal Pınarbaşı
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Outline
 Definition
 Benefits
 Financial position
 Adequate protection
 Tax planning
 Investment and accumulation goals
 Retirement planning
 Estate planning
 Personal Budget
 Software Programs

 It’s not your salary that makes you rich, it’s your spending habits.
 Charles A. Jeffe
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Personal finance is defined as the way in which an individual or a family makes decisions in relation to their financial portfolio.
Personal financial plan: a plan that specifies your financial goals and describes the spending, financing, and investing plans that are intended to achieve those goals

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• Personal Financial Planning may not help you to earn more money, but it will help you to use your money more wisely.
• As part of your personal financial plan, think about what is important to you.
What do you want to accomplish?

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• Budgeting
• Savings
• Investment
• Risk Management
• Cash-flow management

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• Financial position
• Adequate protection
• Tax planning
• Investment and accumulation goals
• Retirement planning
• Estate planning

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Financial Position
 Financial planning needs to understand what his/her/their financial situation is.
 Household assets
 Household liabilities
 Household cash flow

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Financial Position
 Develop and implement a budget
 Calculate your net worth (wealth) using a balance sheet
 Develop a personal income statement and use it to analyze your spending
 Introduce budgeting software: Quicken,
Mint.com and others

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Adequate Protection
 Protected in event of an emergency must also be in place
 Natural disasters and death
 Buying insurance for each of these areas
 Risk Allocation

Tax Planning
 Certainties: Taxes and Death
 Income
 Value of Assets
 Single largest expense in a household
 Tax deductions
 Credits
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Impacts of Taxes
Goals Budget
Estate
Planning
Retirement
Planning
Taxes
Investing
Cash
Management
Savings and Debt
Insurance
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Investment and accumulation goals
 Planning how to accumulate enough money for large purchases
 Major reasons to accumulate assets include purchasing a house or car, starting a business
,paying for education expenses and saving for retirement
 Major risk to the households, the rate of price increases over time or inflation

Investment and accumulation goals
 Financial planners suggest regular savings in a variety of ınvestments
 The investment portfolio has to get a higher rate of return
 Investors risk attitudes vary from person to person
 These types of financial goals require careful planning and secure investments.

Retirement planning
 Personal finance involves planning for your or your families retirement
 You need to know how much money do you need to be retired and how do you finance this retirement

Private pension

Private pension
 This is a long-term investment that are used by intermediaries instead of you
 When you come retirement age, you obtain a sum of money
 Payments are deposited to the Takasbank.They
are under the control of government
 You can see your fund fluctuations on web site.

Retirement companies

Advantages of the private pension
 A small amount of contribution is paid each month
 You can earn more money with less money
 You can determine the degree of risk
 You don’t need to pay an other fee when devolved into another company
 Funds are conducted by professional portfolio managers
 The allocation of funds can be changed six times a year
 There is no loss of money

Disadvantages of the private pension
 To be long-term investment
 You have to pay operating expenses like 8%
 Fund operating deductions are made
 If you exit the system less than 10 years,10% is interrupted
 When you evaluating the savings at exchange,you have to pay a tax for earning per tl to the government.however ıf you evaluate the saving at private pension companies, government don’t get a tax from you.

Estate Planning
• Estate planning involves planning for what will happen when you die, and planning for the tax due to the government at that time.
• Estate planning typically attempts to eliminate uncertainties over the administration of a probate and maximize the value of the estate by reducing taxes and other expenses.
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Personal Budget
 A personal budget is a finance plan that allocates future personal income towards expenses, savings a and debt re-payment.
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Cash Flow Trade Off’s
Key Cash Management tradeoffs:
1. The Risk-Return trade off
2. The Spending-Investment Risk trade off
3. The Time Expended-Return trade off
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Softwares 24

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Conclusion
 How can people protect themselves against unforeseen personal events, as well as those in the external economy?
 How can family assets best be transferred across generations (bequests and inheritance)?
 How does tax policy (tax subsidies and/or penalties) affect personal financial decisions?
 How does credit affect an individual's financial standing?
 How can one plan for a secure financial future in an environment of economic instability?

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 Do you have any question?