What is Financial Planning?

Financial Planning is the process of meeting your life goals through the proper management of your finances. Life goals can include buying a house, saving for your child’s higher education or planning for retirement.

The Financial Planning Process consists of six steps that help you take a ‘big picture’ look at where you are currently. Using these six steps, you can work out where you are now, what you may need in the future and what you must do to reach your goals. The process involves gathering relevant financial information, setting life goals, examining your current financial status and coming up with a strategy or plan for how you can meet your goals given your current situation and future plans.

The Financial Planning process consists of the following basic six steps:
I. Establishing and defining the Client-Planner relationship.
II. Gathering client data, including goals.
III. Analyzing and evaluating your financial status.
IV. Developing and presenting Financial Planning recommendations and alternatives.
V. Implementing the Financial Planning recommendations.
VI. Monitoring the Financial Planning recommendations.

Source: FPSB India

Financial Planning doesn’t end with making of the plan; it involves a constant review of the performance of the plan and changes in circumstances of the Client.