Financial Planning
From Planipedia
Financial Planning is the system of determining a person or firm's financial needs or goals for the future and making recommendations on how to achieve them. Financial planning involves deciding what investments and activities are most appropriate for both personal and broader economic circumstances.
Financial planning is defined as a system whereby a financial planner assists a client to maximize his or her finances by utilizing available financial tools in order to achieve future goals.
Three components make up Financial Planning:
- Financial Resources
- Financial Tools
- Financial Goals
Financial Planning is the process of meeting life goals through proper management of finances. Life goals include purchasing a home, education, or retirement. The Financial Planning process is made up of specific steps to help determine current financial status. Financial Planners follow financial planning steps to help clients find out:
- current financial status
- how much is needed for the future
- what steps have to be taken in order to reach future goals
The financial planning process is used by Financial Planner's to help clients figure out how to meet their life goals. Financial Planners look at the overall financial situation and make financial planning recommendations that are best suited for a client's specific needs. Current spending, saving, taxes, investments, insurance, education, and retirement planning are all taken into consideration.
