Financial Planning
Planning is essentially the process wherein you decide how you’ll be able to achieve your goal, and work accordingly to achieve the same.
Financial planning is same, only it involves your money, and goals are rather more personal.
In general, financial planning is a series of steps taken to achieve your goals- both personal and financial through implementation of a comprehensive financial plan. It implies giving direction to your accumulated resources so that you can accomplish your goals in a pre-defined time frame – along the way making adjustments if any.
Financial planning isn’t a one-time thing – it’s a dynamic process. It is modified over the years so as to entwine the changing financial need and reducing timeline of the goals. It encompasses 360-degree view of your financial life.
It includes:
- Risk Management
- Goal Planning (Retirement being of utmost importance)
- Estate Planning
- Tax Management
Financial Planning Process
One should make sure that instead of stating vague objectives, one should have SMART objectives in place:
- Specific
- Measurable
- Attainable
- Realistic
- Time Bound
Once you have stated your goals, classify them on the following categories:
- Needs/ desires
- Long term/ short term
- Priority
A Certified Financial Planner may actually help you in making of your financial plan. He can actually help you in preparing the comprehensive financial plan.
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