TOPIC 1 - 1.7 CONTINGENCY PLANNING

TOPIC 1 - 1.7 CONTINGENCY PLANNING

1. An individuals personal financial plans evolve as the persons circumstances change. for example when someone leaves home, gets a job, gets married or has a child.

   • Most of the time these events can be planned for. However, some can be a surprise so these need to be considered/included in a financial plan.

2. Contigency planning means to attempt to plan or take into account unexpected events.

3. FAVOURABLE EVENTS

   • Getting a job
   • Having an increase in income/promotion
   • Winning the lottery
   • Paying off a personal loan
   • An increase in saving or the value of an asses such as your house

4. UNFAVOURABLE EVENTS

   • Losing a job
     • Unemployment is a problem for someone who already owes money as it will be harder to pay off debts.
   • Rate of income tax increasing
   • Becoming ill and having to stop work
   • Unexpected car repair costs

5. When interest rates fell, it made loans cheaper. however, banks changed their lendings policies so it was harder for first time buyers so get a loan.