In personal finance, which statement about personal financial planning is true and correctly describes what the process involves?

Introduction / Context:
Personal financial planning is a core concept in basic finance education and interview questions often test whether you understand its meaning. It is more than simply saving money or investing occasionally. It is a structured process that connects your life goals with day to day money decisions. Knowing what personal financial planning really means helps you make better choices about budgeting, borrowing, insurance, investing and retirement, and it also shows employers that you think in a disciplined way about resources.

Given Data / Assumptions:
- The topic is personal financial planning for an individual or family. - We assume the person has some income, expenses, assets and liabilities. - The question asks which statement about financial planning is true. - Only one option correctly captures the idea of a structured process for setting and achieving financial goals.

Concept / Approach:
Personal financial planning is usually defined as an ongoing process of setting financial goals, developing strategies to reach them, taking actions and reviewing progress. It involves analysing your current financial position, deciding what you want in the future and then creating a plan for saving, investing, protecting risks and managing debt. Importantly, it recognises that resources are limited and that financial decisions continue throughout life. A correct statement must reflect planning, decision making and goal achievement, rather than myths like unlimited money or the idea that decisions stop in adulthood.

Step-by-Step Solution:
Step 1: Read each option and identify whether it describes a process of planning or a misconception about money. Step 2: Option A says that personal financial planning is the process of setting, managing and achieving financial goals through organised decisions. This fits standard textbook definitions and mentions goals, process and decisions. Step 3: Option B claims that financial decisions decrease in adulthood. In reality, adults usually make more complex decisions about loans, housing, education and retirement, so this statement is not true. Step 4: Option C claims that family resources are unlimited, which is obviously false. Almost all families face budget constraints and must prioritise. Step 5: Option D suggests that you achieve goals by increasing spending or reducing savings, which is the opposite of sound planning. Achieving goals normally requires controlled spending, higher saving and wise investing. Step 6: Therefore, the only accurate and complete description is given in option A.

Verification / Alternative check:
To verify the answer, compare option A with standard personal finance steps such as assessing your current financial situation, defining goals, identifying alternatives, evaluating risks, creating a plan and reviewing it regularly. Option A aligns with this structured approach and does not include any obvious error. The other options clearly conflict with basic economic realities such as limited resources and the need for continued decision making. This cross check confirms that option A is the correct and sensible choice.

Why Other Options Are Wrong:
Option B is wrong because financial decisions do not decrease in adulthood. Adults handle salaries, loans, insurance and investments, which usually increases decision frequency and complexity. Option C is wrong because no normal family has unlimited resources. Assuming unlimited money removes the need for planning, which is unrealistic. Option D is wrong because increasing spending or reducing savings moves you further away from goals. Correct planning emphasises controlling spending and increasing savings toward specific targets.

Common Pitfalls:
A common mistake is to think that financial planning is only for wealthy people or only about investing in the stock market. In reality, it begins with simple actions like budgeting and setting short term goals. Another pitfall is confusing planning with prediction, as if planning means you can control everything that happens. Good planning accepts uncertainty but prepares for it with emergency funds and insurance. Students sometimes also believe that once they start earning, they can relax and their decisions will become automatic. This is not true; careful decisions are needed at every life stage.

Final Answer:
The true statement is Personal financial planning is the process of setting, managing and achieving your financial goals through organised decisions about earning, spending, saving and investing, because this option correctly describes financial planning as an ongoing, goal oriented process.