What is Financial Planning?
Financial planning is the process of meeting your life goals through the proper management of your finances. Life goals can include buying a home, saving for your childs education or planning for retirement. The financial planning process consists of six steps that help you take a “big picture” look at where you are financially. Using these six steps, you can work out where you are now, what you may need in the future and what you must do to reach your goals. The process involves gathering relevant financial information, setting life goals, examining your current financial status and coming up with a strategy or plan for how you can meet your goals given your current situation and future plans.
Financial planning is a simple and effective way to plan for your financial future just as you plan for anything else. For example, to watch a movie you need to find the theater where it is playing, the route and the transportation you need to take to reach the theatre and the price of the ticket. Similarly in a rapidly changing world, it is important to know your financial position and gauge how much money is required to realise your dreams including financial freedom.
Financial Planning is the process of managing your expenses, savings and investments to ensure you meet your desired lifestyle and milestones. The financial planning process involves analysing your current situation, budgeting, and projecting future cash flows to determine how to reach your financial goals. Financial goals can include buying a house, planning for your children’s education, personal education, family vacation or retirement. Appropriate investment is a sub-set of financial planning, and, properly managed over a period of time, can provide a good source of returns and income.
Financial planning is a systematic process for identifying, implementing and reviewing strategies to help protect and build your personal wealth. An important benefit of financial planning is action. Taking action does not allow us to waste time and miss opportunities that may exist. By planning with a professional, your financial confidence and potential for obtaining your goals may greatly improve.
