Financial planning is the act of managing your income; setting your financial goals and then allocating your assets across investments keeping in mind your limitations and requirements.
There are a few financial goals that are very important for every individual like owning a new home, starting a business, education of children, or retirement planning but as we all know each thing comes with a price tag attached to it, that’s where financial planning comes in.
Despite its name, Financial Planning is more about life than money. It is a process that can help you reach your goals by evaluating your whole financial picture, then outlining strategies that are tailored to your individual needs and available resources. It is a crucial activity which is meant for future.
Financial planning is a highly-personalized process. You need to take into account multiple factors about your life – past, present and future – in order to form a feasible financial plan. Remember, for a plan to be effective, it has to be well-thought, comprehensive and with an eye on the future. Simply put, a financial plan has to be planned by individuals keeping in mind their stage in life cycle and their needs. It is a cyclical service that constantly repeats as clients need change over time. Both the client and planner have certain responsibilities to make the exercise a success.