Category:Planning And Managing Finances

Planning and Managing Finances is one of the four content areas of the Financial Competence Framework^[1]

This content area covers the knowledge, skills and attitudes related to budgeting; managing income and expenditure; saving; investing; longer term planning; retirement; credit; debt and debt management.

The main goal of this content area is to establish competences for managing the financial situation of an individual or household in the short and long term. This not only includes managing income and expenditure on a day-to-day basis but also planning for the future; it covers competences related to both saving and investments, and credit and debt management.

Managing income and expenditure relies on budgeting and accurate management of incoming and outgoing money. The competences in the budgeting, managing income and expenditure section pay particular attention to the importance of planning and keeping control of money in-flows and out-flows. They also highlight how the use of budgeting tools can help.

Saving or investing are also important aspects of planning and managing finances. The content area includes competences that emphasise the importance of putting money aside, how to do it and what types of products can be used for this aim. In addition, the basics of investing, diversification and sustainable investment are also covered.

To achieve financial well-being, the individual should look beyond short-term considerations and take into account long-term financial needs. Hence, the content area also includes competences related to retirement, long-term planning and asset building.

Finally, the last sections in this content area focus on credit and debt management. Competences in these sections aim to make individuals aware of positive and negative aspects of credit, when it is advisable to apply for credit, how to avoid financial hardship related to debt and how to overcome situations of over-indebtedness.

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