Financial Planning

STEPS TO CREATE A FINANCIAL PLAN

1. Identify Your Financial Goals. By identifying your financial goals, you’ll have a clear idea of what you need to accomplish to make them happen. Your goals should be realistic and actionable and include a timeline of when you want to accomplish them.

2. Set a Budget. Having a clear picture of your finances will make it easier to achieve any financial goals. A budget can help you understand where your money is going each month.

3. Build an Emergency Fund. Building an emergency fund will help make sure that a financial emergency doesn’t become a catastrophic financial event.

4. Reduce Your Debt. Having to make debt payments each month means you’ll have less money to allocate toward your purchase goals. 

5. Invest for the Future. Although risky, investing can help grow your money, even if you’re not wealthy.

BENEFITS OF FINANCIAL PLANNING

• Increase Your Savings. When you create a financial plan, you get a good deal of insight into your income and expenses. You can track and cut down your costs consciously.

• Enjoy a Better Standard of Living. With a good financial plan, you would not need to compromise your lifestyle. It is possible to achieve your goals while living in relative comfort.

• Be Prepared for Emergencies. Creating an emergency fund is a critical aspect of financial planning. You don’t have to worry about procuring funds in case of a family emergency or a job loss. 

• Attain Peace of Mind. With adequate funds at hand, you can cover your monthly expenses, invest for your future goals and splurge a little for yourself and your family, without worry.

TYPES OF FINANCIAL PLANNING

• Tax Planning. Financial planning often helps clients address certain tax issues.

• Estate Planning. It seeks to make things a bit easier for your loved ones after you die. It also helps prepare for any estate tax you may be subject to.

• Retirement Planning. You presumably want to stop working someday. They ensure that you’ve saved enough money to live the lifestyle you want in retirement.

• Philanthropic Planning. It’s always nice to give something to people who need it or help a cause close to your heart.

• Education Funding Planning. If you have children or other dependents who wish to pursue a college degree, you may want to help them to pay for it. 

• Investment Planning. It can still help with your investment portfolio by mapping out how much you should be investing and in which types of investments.

• Insurance Planning. A financial planner can help you evaluate your insurance needs. Some financial planners are also licensed insurance agents and can sell you insurance themselves.

• Budgeting. The cornerstone of financial planning, budgeting can make sure you are spending the right amount given your income and can also make sure that you aren’t going into debt.