Financial Planning
Creating A Personal Financial Plan
Financial Planning: Helping You See The Big Picture:
Do you picture yourself owning a new home, starting a business, or retiring comfortably? These financial goals may be important to you, and each comes with a price tag attached.
That's where financial planning comes in. Financial planning is a process that can help you target your goals by evaluating your whole financial picture and then outlining strategies tailored to your individual needs and available resources.
Why Is Financial Planning Important?
A financial comprehension plan serves as a framework for organizing the pieces of your financial picture. With a financial plan in place, you'll be better able to focus on your goals and understand what it will take to reach them.
A financial plan's main benefit is that it can help balance competing financial priorities. A financial plan will clearly show you how your financial goals are related-for example, saving for your children's college education might impact your ability to save for retirement. Then, you can use the information you've gleaned to decide how to prioritize your goals, implement specific strategies, and choose suitable products or services. Best of all, you'll know that your financial life is headed in the right direction.
The Financial Planning Process
Creating and implementing a comprehensive financial plan generally involves working with financial professionals to:
- Develop a clear picture of your current financial situation by reviewing your income, assets, and liabilities and evaluating your insurance coverage, investment portfolio, tax exposure, and estate plan.
- Establish and prioritize financial goals and time frames for achieving these goals.
- Implement strategies that address your current financial weaknesses and build on your financial strengths.
- Choose specific products and services that are tailored to help meet your financial objectives.
- Monitor your plan, making adjustments as your goals, time frames, or circumstances change.
Some Members of The Team
The financial planning process can involve a number of professionals.
- Financial Planners typically play a central role in the process, focusing on the overall financial plan and often coordinating the activities of other professionals with expertise in specific areas.
- Accountants or tax attorneys provide advice on federal and state tax issues.
- Estate planning attorneys help you plan your estate and give advice on transferring and managing your assets before and after your death.
- Insurance professionals evaluate insurance needs and recommend appropriate products and strategies.
- Investment advisors provide advice about investment options and asset allocation and can help you plan a strategy to manage your investment portfolio.
Staying On Track
The financial planning process doesn't end once your initial plan has been created. Your plan should generally be reviewed at least once a year to ensure it's up-to-date. It's also possible that you'll need to modify your plan due to changes in your personal circumstances or the economy.
Financial fitness is not a pipe dream or a state of mind it's a reality if you are willing to pursue it and embrace it - Will Robinson.