While you can’t forecast the future, an individual should surely be more prepared for this as most of us have our aims to be fulfilled at each period of life and those aims will only be achieved if a person has completed the fiscal preparation.
So, its best to begin planning today as prevention is always better than cure. It’s a systematic strategy whereby the financial planner maximizes the client’s present financial assets using the proper financial resources and investment vehicles to best achieve his financial goals and objectives.
To put it differently, it’s the practice of fulfilling daily life goals through proper management of someone’s finances. Life goals can include buying a house, saving for children’s education, purchasing a vehicle, protecting the family against financial dangers or planning for your retirement.
The demand for financial planning arises in the requirement of fulfilling the financial goals of somebody’s life & it assists to have an extensive look towards the future’s needs and goals such as cash flow, debt management, education funding, retirement planning, estate conservation, and portfolio administration financial planning benefits. Additionally, it provides you the way to make informed decisions regarding your investments so you will not make any errors and you are able to reap the advantages of your preparation for the remainder of your life.
Financial planning(FP) is a straightforward mathematics. There are 3 Big elements:
If you wish to make the most of your present fiscal resources using various financial instruments to attain your financial objectives, that is fiscal planning.
Advantages of Financial Planning:
Financial Planning ensures the ideal quantity of money is offered in the ideal hands at the ideal time period in the future to attain specific financial objectives. Practically anyone with average riches or a decent income may avail the benefits of financial planning like:
It’s based on individual risk profiling, and it gives a road map to attain financial targets
It can help you have a big picture’ look in your financial standing and it guides you to analyze your present financial status and determine goals.
It sets in place the hazard management system to fulfill doubts of life through effective Insurance Planning, Tax Planning, and Estate planning.
It’s the practice of handling your cash to attain private financial gratification. It permits you to control your financial situation and offers a sense of safety and less anxiety.
It’s a disciplined way of managing your finances to accomplish life objectives. It entails a systematic & disciplined investment system, which aids in generating wealth over a time period. It gives you the ability to become more accountable for disciplined investing.
Financial Planning Procedure:
The Financial Planning Process includes six measures, using that, you are able to figure out where you are now, what you might need later on and what you have to do in order to accomplish your objectives.
Measure 1: Determine Your Current Financial Situation
Measure 2: Create Financial Goals
Measure 3: Create Many options
Measure 4: Assess Alternatives
Measure 5: Make and Implement an Action Plan
Measure 6: Re-evaluate and Revise One’s Strategy