What is Financial Planning?
Financial planning is the process of meeting life goals through a proper planning and management of finances. Financial planning helps us to translate our dreams and aspirations in to reality.
It also helps us to provide meaning and direction to our financial decisions.
Financial planning has to be done in a proper way, so that it can be implemented effectively.The important steps to be followed while planning our finances are,
- Analyse your dreams and aspirations
- Establish the goals
- Analyse your financial status
- Analyse your emotional status
- Develop a plan for achieving the goals
- Implementing the plan
- Monitoring the plan
During the financial planning process you analyze what your financial needs and goals are. Then, you quantify in money terms what resources you need to meet those goals, and quantify the time period during which you want to achieve these goals. Finally, you write an action plan on what you need to fulfill your plan in terms of what products to buy and what types of savings to make.
Can you do Financial Planning yourself?
Of course you can…but just like you won’t repair your own watch or car on your own, you need to come to an expert for financial planning. Otherwise, without the right financial skills and tools for financial planning, your finances can end up as a disaster.
If you feel you can do financial planning on your own, you might want to answer the following questions:
- Is your family going to be financially secure, whatever happens to you?
- Are your finances tax efficient? Do you know how to legally save taxes?
- Are you confident that investments give you the best return in a rising or
a falling stock market?
- Do you have enough money to pay for your son or daughter’s education? How about for their wedding?
- Do you wish to retire in the mountains or next to the beach? Is this just a wish, or have you enough money to turn this wish into reality?
- If you don’t have a Will, do you know what will happen to your hard earned assets upon your death?
If you did not answer yes to all of the above, then you should feel uncomfortable. You must see an Ask4Money – specialist who can make the right recommendations for you.