About This Chapter
General Principles of Financial Planning - Chapter Summary
The general principles of financial planning represent basic knowledge for financial and accounting professionals, and revisiting the basics every so often may prove essential for understanding more advanced topics or for test preparation. The lessons offered in this chapter discuss a full range of financial planning principles, from the steps businesses take to make financial plans all the way to the main strategies for managing and reducing debt. By completing this chapter, you'll get the chance to review the following:
- The process of financial planning
- Purpose and examples of financial statements
- Cash flow definition and related formulas
- Methods for controlling cash
- Types of financing
- Money-borrowing strategies
- Description and principles of economics
- Time-based calculations for value
- Planning attitudes and behavioral finance
- Examples of effective business communication
- The process and types of financial counseling services
- Definition of and options for debt management
We offer multiple resources to help you prepare for tests and exams. Many of the test-prep chapters that we offer provide video lessons that allow you to hear the instructor as you see the vocabulary words, concepts, and images displayed on the screen. Several of the videos include animations that keep you engaged as you get reacquainted with these general financial planning principles.
Our instructors understand that you probably have a background in financial planning, so you may not need to review every single lesson. One of the fun ways you can skip around in the video lessons involves the timeline feature. Under every video lesson, you can click on the timeline option, which shows you a breakdown of each lesson. For example, instead of viewing the entire 'Types of Financing' lesson, you may decide you only want to watch the part that talks about home financing.
1. The Financial Planning Process
Financial planning is essential for the success of any business. In this lesson, you'll learn about the financial planning process that businesses perform, including preparation of a master budget, capital budget and cash budget.
2. What Are Financial Statements? - Definition, Purpose & Importance
Financial statements are big players in the world of accounting. In this lesson, you will be introduced to each of the financial statements. You will also learn what their role is in the accounting industry, who they are important to and why they are important.
3. What Is Cash Flow? - Definition, Calculation & Example
Companies can't function without sufficient cash flow. In this lesson, you'll learn what cash flow is and how to calculate it, and you'll be provided some examples. You'll also have a chance to take a short quiz.
4. Control of Cash: Definition & Methods
Cash is a valuable commodity and one that is vulnerable to fraudulent activity. In this lesson, you will learn what makes up a company's cash account as well as how to control cash.
5. What Is Financing? - Definition & Types
People borrow money to purchase homes, cars, boats, or anything else they don't have the money for at the moment they want to make the purchase. In this lesson, learn what financing is, as well as different types of financing used every day.
6. Financing Strategies for Borrowing Money
Borrowing money can be scary when you do not understand the basics. How do we know when we are getting a good deal or when we are being taken advantage of? This lesson provides tips for making good decisions when borrowing money.
7. What is Economics? - Definition & Principles
Why do we buy more when something goes on sale? At what point does one stop consuming a good they love to consume? All of these can be addressed by the principles of economics, which are discussed in this lesson.
8. Present and Future Value: Calculating the Time Value of Money
A central concept in business and finance is the time value of money. We will use easy to follow examples and calculate the present and future value of both sums of money and annuities.
9. Behavioral Finance & Financial Planning Attitudes
In this lesson, we will discuss the different financial planning attitudes, values, and biases that both financial advisers and investors may have. We will also discuss their relationship with the field of behavioral finance.
10. What is Effective Business Communication?
Effective business communication is essential in the business world. This lesson will discuss how to make sure you are effectively communicating in business writing.
11. Financial Counseling Services: Types & Process
The lesson will discuss several different types of financial counseling services and how they are set up to assist individuals facing financial troubles. The lesson will also address the processes involve with each type of service.
12. Debt Management: Definition, Types & Examples
In this lesson, we'll define debt and interest. You'll also learn three debt management strategies: budgeting, paying early and reducing high interest debt first.
Earning College Credit
Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.
To learn more, visit our Earning Credit Page
Transferring credit to the school of your choice
Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.
Other chapters within the CFP Certification Exam Study Guide - Certified Financial Planner course
- CFP Board Rules & Regulations
- Financial Planner Professional Conduct & Regulation
- Education Financial Planning
- Individual Insurance Planning
- Risk Management & Business Insurance Planning
- Types of Investment Vehicles
- Investment Planning
- Tax Planning
- Retirement Savings & Income Planning for Individuals
- Retirement Savings & Income Planning for Businesses
- Estate Planning Strategies
- Financial Planning for Personal Life Situations
- CFP Client Relationship
- CFP Certification Exam Study Guide - Certified Financial Planner Flashcards