Private financial planning

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Private financial planning or personal financial planning ( English personal financial planning ) is the financial planning of private households .


Private households ( single people and families ) can use the same planning methods and instruments for their financial planning as those developed in business administration for companies and public households . There the financial planning is discussed as part of the overall corporate planning with special consideration of the financing and corporate goals. According to Erich Kosiol , financial planning is a regular task of the financial sector that has to be carried out at regular intervals. The current capital requirementis provided through financing, where a distinction must be made between self-financing and external financing . The main difference between companies and private households is that the latter often have little or no general financial education and therefore financial planning techniques without specialist knowledge do not lead to success.

Peculiarities of private financial planning

The private equity financing is carried out of the income of households, which consists of labor income , capital income or transfer income can assemble. In addition, disposals of savings ( saving in the broadest sense) or proceeds from the sale of assets belong to self-financing. These sources of finance are available - isolated or combined - for larger purchases made by a household ( household items , automobiles , residential property ). If the means of self-financing are insufficient, the budget must decide whether to take out loans . In this case at the latest, the budget must draw up a financing plan, which is considered an important loan document by credit institutions and forms part of private financial planning.

Private financial planning often fails due to a lack of or insufficient general financial education . Financial literacy encompasses both abstract knowledge of fundamental financial relationships and the functioning of financial products as well as concrete experience in dealing with banking and insurance products. Consumer vulnerabilities are primarily investment , borrowing, and insurance . According to a 2004 study by the Bertelsmann Stiftung , 47.3% of those surveyed said they were reluctant to deal with finances , 50.2% postponed financial decisions even though 61% had time to do so, and 61.8% felt financial issues as difficult. On the one hand, the basic financial knowledge for appropriate pension and investment decisions is insufficient in large parts of the population; on the other hand, the proportion of correct answers usually increases with educational level and income; respondents also dare to answer the financial questions more often or refuse to answer the less, the higher their level of education or income .


Private financial planning includes the life cycle-oriented prognosis of a private household about the future development of income / expenditure ( private liquidity calculation ) and assets / debts , taking into account financing , investment , retirement , succession and tax aspects while taking into account individual financial goals . It is used to prepare decisions in personal financial matters and is often narrowed down to investment advice in specialist literature . But the decision about whether someone can financially afford a car is just as much a part of private financial planning as the decision to protect oneself from damage caused by insurance .

In addition, comprehensive financial planning also takes into account legal, psychological, philanthropic and ethical issues, the planning of training , career , leisure budget and retirement as well as the transfer of assets across family generations, including the drafting of wills , marriage contracts , gifts or the establishment of foundations . It also includes private internal auditing , i. H. Monitoring the structure and development of payment flows, assets, liabilities and the legal and economic framework of a household.


Unlike many ad hoc - decisions , which are common in individuals in everyday life ( spontaneous purchase ), private financial planning is based on a systematic approach. To do this, it uses analysis methods that are borrowed from operational financial planning. In a first step, the goals as well as the financial, personal and family starting situation of the private household are recorded. This includes drawing up a private balance sheet , a private liquidity calculation (using a household book if necessary ) and a private profit and loss account , as well as an analysis of existing pension entitlements in old age and illness. In this way, conclusions can be drawn about the feasibility of the goals, about foreseeable events and risks. First of all, the necessary protection against financially existence-threatening events and risks is determined (e.g. disability , liability , in the case of financially dependent relatives, death).

According to outdated, classic (but still predominant) methodology, budget planning is carried out based on the data for current income and the remaining money is invested in long-term savings, provided there are no loans that can be repaid with it. It should be increased or at least maintained until retirement , and unnecessary risks should be avoided. The modern paradigm, on the other hand, ( Robert Merton , Paul Samuelson , Zvi Bodie ) sees the goal, conversely, in the optimal risk-preference-appropriate distribution of expenses over the life cycle (see also consumer-investment problem ). A savings rate (which fluctuates more or less strongly depending on the risk) is specified by a model, and budget planning must then be carried out for the remainder.

Two major problems arise in the investment planning for the available financial resources, on the one hand the asset allocation and on the other hand the so-called " asset location ". Asset allocation deals with the selection of asset classes (e.g. division between riskier investments (e.g. securities ) and relatively safe investments (e.g. savings deposits ), selection and weighting of individual investments such as individual stocks and bonds ). The “Asset Location” deals with the question of the tax structure in which financial products should be acquired for these investments as efficiently as possible (e.g. direct investment, investment fund , insurance jacket ).

Financial risks

Households must take into account impending financial risks in their private financial planning , in particular the compulsive propensity to consume ( consumerism ), insufficient adjustment of expenditure to falling income , lack of money , the avoidance of general life risks , incapacity for work , illness , divorce , death of close relatives , uninsured liability for damages , unexpected additional payments ( Operating costs or taxes ), dangers from concentrated investments ( cluster risk or granularity ), from above-average debt servicing for loans due to over-indebtedness or from excessively high rental costs . For the last two risks there are the economic key figures of the debt service coverage ratio and the rent burden ratio . Many of these risks can be insured, the non-insurable ones have to be borne by self-insurance from your own assets. This arises from the accumulation of assets , which can also be viewed as the creation of provisions and reserves , which companies and public budgets are legally obliged to do .

Risk of personal bankruptcy

It is obvious that personal bankruptcies can tend to be an expression of excessive demands from citizens with private financial planning.

According to the Debt Barometer 2018 the credit bureau CRIF Burgel 2010 was a record year with the high number of 139,110 registered in Germany personal bankruptcies (individuals and formerly self-employed ). Thereafter, the annual number of personal bankruptcies fell year after year to the level of 88,995 personal bankruptcies in 2018. A breakdown of personal bankruptcies by age group shows that the age group of 31 to 40-year-olds is the most affected with 24,852 cases. In the highest age group 61 and over, there were 9,338 cases. From a regional perspective, there is essentially a north-south divide in terms of personal insolvencies: the national average was 107 personal insolvency cases per 100,000 inhabitants in 2018. The southern federal states of Baden-Württemberg and Bavaria are particularly well below this average with 72 and 73 cases per 100,000 inhabitants. The following federal states are highest (cases per 100,000 inhabitants in brackets): Bremen (166), Lower Saxony (150), Saarland (146), Schleswig-Holstein (145) and Hamburg (143).

In addition to the low unemployment rate, CRIF Bürgel suspects that the reason for the significant decline in personal bankruptcies in recent years is also the seizure protection account, which prevents many overindebted citizens from registering for personal bankruptcy.

After the number of personal bankruptcies in the age group 61 and over had risen in the years 2012 to 2015 (the increase was 26 percent in 2015 compared to 2011), a trend towards increasing old-age poverty was suspected at the time, which is reflected in the further development of personal bankruptcies not confirmed until 2018.


The main providers of private financial planning as a service are credit institutions ( often as part of private banking in the case of banks , savings banks or cooperative banks ), financial distributors , asset management companies and independent investment advisors , brokers , fee advisors and, in some cases, tax advisors .

There are professional associations of financial planners in many countries that publish their views on criteria for good financial planners. Many of these associations are members of the Financial Planning Standards Board Ltd. affiliated, including the FPSB Germany eV and the Austrian Association of Financial Planners. These associations award quality certificates to their members, such as the internationally recognized title of Certified Financial Planner and the "European Financial Planner" popular in Spain and Italy. The world's largest professional umbrella organization for financial planners is the Financial Planning Coalition (FPC) in the USA, consisting of the Certified Financial Planner Board of Standards (CFP Board), the Financial Planning Association (FPA) and the National Association of Personal Financial Advisors (NAPFA) .

See also


  • Günter Schmidt: Personal financial planning - models and methods of financial planning , Springer, Berlin 2011, ISBN 978-3642204586
  • CFP Board: Financial Planning Competency Handbook . Hoboken 2013, ISBN 978-1118470121
  • Thomas Hammer / Barbara Rück: Investment in a very specific way: The independent guide for savers and investors Consumer advice center , pp. 210–221: The basic rules of private financial planning . Consumer advice center NRW, Düsseldorf 2009, ISBN 978-3940580726
  • Michael Böckhoff / Guido Stracke: The financial planner . Verlag Recht und Wirtschaft 2003, ISBN 978-3800572816
  • Dirk Farkas-Richling / Wolfgang Staab: Private financial planning, investment and taxes: Know-how for modern financial advice and asset management . Schäffer-Poeschel 2003, ISBN 978-3791021485
  • E. Danby Brandon / H Oliver Welch: The history of financial planning. The transformation of financial services . Wiley 2009, ISBN 978-0470180747
  • Rolf Tilmes (Ed.): Financial Planning in Private Banking: Customer-oriented presentation of a consulting service . 3rd edition Bad Soden 2002, ( online )
  • Philipp Wackerbeck: Private financial planning at insurance companies: The customer-oriented redesign of the business model . Bad Soden 2006, ( online )
  • Ralph Jakob: Financial Planning and Sales: Design and positioning of a financial planning-based sales concept from a theoretical and empirical point of view . Bad Soden 2007, ISBN 978-3933207593

Web links

Individual evidence

  1. ^ Fritz Neske / Marcus Wiener (eds.), Management-Lexikon , Volume 2, 1985, p. 428
  2. Erich Kosiol, Finanzplanung und Liquidität , in: ZfhF 7th year, 1955, p. 254
  3. Ludwig Orth, The short-term financial planning of industrial companies , 1961, p. 48
  4. Johannes Leinert, Financial Illiteracy in Germany: Poor Conditions for Independent Provision , in: Health and Social Policy, No. 3/4, March 2004, p. 29
  5. Johannes Leinert, Financial Illiteracy in Germany: Poor Conditions for Independent Provision , in: Health and Social Policy, No. 3/4, March 2004, p. 29
  6. Wesselin Kruschev, Private Financial Planning: The New Service for Demanding Investors , 1999, p. 17
  7. Zvi Bodie : Life-Cycle Finance in Theory and in Practice , p. 2, table 1
  8. ^ Paula H. Hogan: Life-Cycle Investing Is Rolling Our Way (PDF; 294 kB). Journal of Financial Planning (2007)
  9. Larry Swedroe / Kevin Grogan / Tiya Lim, The Only Guide You'll Ever Need for the Right Financial Plan , Chapter 10, 2010, o. P.
  10. a b c Debt Barometer 2018: Personal insolvencies are falling to the lowest level since 2004 - Bremen remains a bankruptcy stronghold despite a sharp decline. CRIF Bürgel GmbH, March 21, 2019, accessed on June 21, 2019 .
  11. Debt barometer 2015: Personal bankruptcies fall by 6.4 percent - fourth increase in a row among older Germans. CRIF Bürgel GmbH, March 3, 2016, accessed on June 21, 2019 .
  12. Tax law, when tax advisors mutate into financial planners ( memento of the original from January 16, 2013 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot /