Facing a financial crisis such as serious illness layoff or natural disaster.
According to Financial Planning Association, Financial planning is a process, not a product. It is the long-term method of wisely managing your finances so you can achieve your goals and dreams, while at the same time negotiating the financial barriers that inevitably arise in every stage of life. In order to create a sound financial plan, goals must first be established. Data is then gathered to analyze and evaluate your financial status. Once complete, your plan can be developed and implemented. Monitoring the plan on an ongoing basis is essential in order to make necessary adjustments to reach your goals.
Benefits Of Using A Financial Planner
Procrastination is the greatest enemy of financial independence and using a financial planner will keep you on track.
Coping financially with the death of a spouse or close family member.
Handling the inheritance of a large sum of money or another unexpected financial windfall.
Making sure your money will last during retirement or rolling over a retirement plan.
Preparing for a marriage or divorce.
Planning for the birth or adoption of a child.
Caring for aging parents or a disabled child.
Buying, selling or passing on a family business.
What Is Financial Planning?
Financial planning is about three key things: finding out where you stand financially, naming your personal financial goals, and creating a plan to reach those goals. It’s that easy! Financial Planning identifies, organizes and prioritizes your financial goals, then outlines the steps you need to take to achieve them. They can also lend some insight as to if you’re on track to meet your financial goals or if you need to make adjustments to your spending. These plans may revolve around consolidating debt, opening bank or brokerage accounts, establishing a savings regime or building an investment plan.
Steps To Create A Financial Plan
Most people have a wide range of short- and long-term financial goals, from paying down debt to planning for retirement, to building a college fund, or whatever the goal is. But since everyone’s personal situation is unique, each financial plan will look a bit different. In general, though, there are five main steps to the creation of any in-depth financial plan:
Determine your financial goals.
Create a short- and long-term plan to reach your financial goals.
Adjust your financial plan as your life and goals change.
The right thing to do before you make financial decisions is to know your options.