Financial Planning is a step by step process of evaluating a person’s present money situation and his long term monetary goals and then constructing a strategy to achieve these goals. The importance of financial planning can never be ignored at any point in life. However, our financial priorities do vary according to what phase of life we are in.
The importance of financial planning can never be ignored at any point in life. It creates a roadmap for your money. Everybody needs a financial plan to
- Focus on their future goals and have a bigger picture in mind
- Goal priority
- Increase your savings and prepare you for any emergencies
- Attain peace of mind by worrying less about money and gain control
- Helps in organizing finances
A Financial Plan includes every aspect of your finances. It should cover saving and investing, paying debts, insurance, taxes, retirement planning and estate planning. It addresses 2 sides:
- Accumulation through Cash Management, Tax Planning and Investments and
- Protection through Insurance Planning, Health Insurance and Estate Planning.
It is always advisable to take help of a Financial Planner while creating a financial plan. He/she can help you in realizing and setting a specific plan by giving attention to your priorities. However, our financial priorities do vary according to our stage in life and thus our financial plan is defined differently.