Financial planning is a holistic process for reaching financial goals of
an individual.It can be done by proper management of personal finance.Personal
finance include all type of personal savings, investments and loans.
Normally,people start to save with bank accounts,chit funds or post office
schemes.Investments means putting money in shares,mutual funds,real estate or
commodities such as gold.Financial goals are very important in financial
planning.These are life needs such as buying a home or property, savings for
children’s education and marriage, wealth creation , retirement planning etc.
Professional Financial planning process consists of six major steps.
1.Collecting
client's financial data about income,expense and netwoth .
2.Setting financial
goals to fulfill ambitions.
3.Analysing current
financial condition.
4.Creation of
strategy to meet life goals.
5.Recommendations
for transforming personal financial condition to better levels.
6.Periodical Review
of the plan to assess the progress .
Financial
planning process help us to analyse personal assets, liabilities and
networth. Some people may be in a debt trap due to overspending or lack
of financial discipline. Others may suffer due to concentration in too
many financial products.No agent or broker can provide a holistic
solution.Financial planning is the solution to attain life goals.Finding right
financial scheme or product is not an easy task for a common man.
Financial planning fix priorities for life.It helps to avoid unnecessary
expenditures.we can fix different time horizon for short term,medium term or
long term goals.Thus,financial planning build the foundation for reaching
financial freedom.
On behalf of this blog, I can understand that we should think about the financial planning- emergency funds and insurance. I understand financial plan is very important for every high net worth clients and business. Should I build emergency funds or buy a term plan? Nice question asked on behalf of us.
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