Every person needs his or her own financial plan – after all, we wouldn’t go on a holiday without proper planning, so why live our entire life without properly plan our finances? The first step is to assess where we stand today, and where we want to reach after a specific period of time. To do this, we need to first measure our financial health.
Most of us get a complete physical health checkup once a year, especially after a certain age. This is done so that we know our health issues if any, and can treat any ailments before they cause any damage. Our finances are as important to us as our health and deserve at least the same amount of care and attention.
We understand that Financial Planning can help to get our financial life in order. We want to take a planned approach in achieving financial success and not depend on chance alone. Building a financial plan for our self can seem confusing – not only we are too close to the financial planning since it involves our own finances, but also it is a complex process which takes into account a number of pieces of our personal financial information – like a large puzzle where each piece is our own financial data and requirements.
We all live and strive for certain goals in life. Goals and Objectives provide focus, purpose and vision to the financial planning process. By setting our financial goals we will be able to define our priorities, establish a direction and identify the results that we expect to achieve.
Financial planning involves planning for our life goals such as -Purchase of home, Purchase of car, Child’s Education, Supporting our parents, Child’s marriage, Retirement, Vacation, Buying Holiday Home, Wealth accumulation, Creating trusts, Charity and any other goals we may want to achieve. In this process first step is to determine and quantify the goals is very important and then assess the cash flows to see how to allocate funds towards the goals in a manner that goals are suitably achieved.