Financial Planning

Financial Planning is the process of meeting our life goals through the proper management  by our finances.Goals in Life like Buying a house,Savings For Children s Higher Education & Marriage or Retirement Planning. 

The Financial Planning Process involves Six steps,these six steps we can finding our Current Level.Using these level strategy we can get a clear idea about where we are now what we may need in the future and what we must do to reach your goals.

These process consists 1.collecting relevant financial information,2.Setting goals for our Life, 3.Examining our current financial status and coming up with a strategy or plan for how can we meet our goals given in our current situation and future plans.

Benefits

Financial Planning provides direction to our Financial needs and meaning to our financial decisions.It makes an understanding about how much each our financial decision  make affects other areas of your finances. 

For example, buying a particular investment product might help us pay our loans faster or it might delay our retirement plan significantly.By viewing each financial decision as part of the whole, we can consider its short and long-term effects on our life goals. we Can easily adapt to changes in our Life & Secured feeling on our Goals are on track.

Financial Planning Process

These are Following Six Steps of Financial Planning

Setting measurable goals Understanding the impact of each financial decision Periodical Review of Our Financial situation Start planning Early Be realistic in our expectations Realizing that we are responsible Setting measurable goals Setting Goals is the First Step Of Financial Planning Process.Everyone having some Goals to achieve in their Lifetime.Set specific Our Goals for us and when we want to achieve that. For example,  Children to be in Comfortable Position or Comfortable life During Retirement.

Understanding the impact of each financial decision Each financial decision we make can affect several other areas of our life. So,Before taking any Financial Decision,we have to think how far its affects our Goals achievement. For example, an investment decision may have tax consequences that are harmful to your estate plans. Or a decision about your child's education may affect when and how you meet your retirement goals. Remember that all of your financial decisions are interrelated.

Periodical Review of Our Financial situation Financial Planning is a dynamic process. our financial goals may change over the years due to changes in our lifestyle or circumstances, such as an inheritance, marriage, birth, house purchase or change of job status.  Revisit and revise our Financial Plan as time goes by to reflect these changes so that we can stay on track with our long-term goals.

Start planning Early Developing good Financial Planning habits such as saving, budgeting, investing and regularly reviewing our finances early in life, we will be better prepared to meet life changes and handle emergencies.Investing small amounts of money early, and often, tend to do better than those who wait until later in life.So,Don't delay our Financial Planning.

Be realistic in our expectations Financial Planning is a common sense disciplined approach to managing our finances to reach life goals. It cannot change our situation overnight; it is a life long process. Remember that events beyond our control such as inflation or changes in the stock market or interest rates will affect our Financial Planning results.

Realizing that we are responsible understanding the Financial Planning process and what the Planning should be doing. Because we are Responsible for our Financial Decisions. Importance of Financial Planning Financial Planning is process of framing objectives and budgets regarding the financial activities of a Person to achieve their Individual Life Goal.This ensures effective and adequate financial and investment policies. The importance can be outlined as- Organize and take control of our finances. Allows to plan for retirement. Financial Planning helps in ensuring a reasonable balance between outflow and inflow of funds so that stability is maintained. Financial Planning helps in making growth which helps in Comfortable survival of a Person. Through prudent Risk Management strategies, it lowers Investment risk. Financial Planning reduces uncertainties with regards to changing market trends which can be faced easily through enough funds. Financial Planning helps in reducing the uncertainties,this helps in ensuring stability. Common Mistakes in Financial Planning Approach The following are some of the common mistakes made by consumers in their approach towards Financial Planning. Don't set measurable goals. Make a financial decision without understanding its affect on other financial issues. Confuse Financial Planning with investing. Neglect to re-evaluate their Financial Plan periodically. Think that Financial Planning is only for the wealthy. Think that Financial Planning is for when they get older. Think that Financial Planning is the same as retirement planning. Wait until a money crisis to begin Financial Planning. Expect unrealistic returns on investments. Think that using a Financial Planner means losing control. Believe that Financial Planning is primarily tax planning.