The Art of Financial Planning Part 1:
What is financial planning? What can it do for you?

If wishes were horses, beggars would ride. Every time you set out to buy a new car or a posh apartment, this adage is oft quoted by your friends and family. It is a widely established misconception that finance is too scary and too complicated a subject that it is better to ignore it altogether. What is imperative are a few adjustments to be made by denying instant gratification through an intelligent financial planning.

Financial planning is the phenomenon of summiting life’s goals through systematic management of one’s finances. Life goals would mean buying a home, saving to your children’s education or forecasting and preparing well in advance for retirement. The various financial issues an individual faces can be listed as cash management, accumulation of goals, financial independence and estate planning. An intelligent financial planning calls for curbing short-term temptations for attaining more important long term goals. For this, first you have to determine the significant goals of your life, devise an asset allocation strategy to meet these goals and eventually select investment products accordingly.

Financial planning helps in taking control of your finances. It makes you to see the future with a clear vision, ensuring you discipline and giving you a focus, it assesses your risk tolerance capacity and safeguards your family against financial crises especially in the event of death or disability. Altogether, financial planning plays a significant role in rendering you a peaceful life.

The financial planning process goes through a series of stages. It involves establishing and defining the client partner relationship. The financial planner gathers information about the client’s financial situation. With this, the client’s financial problems can be identified and consequently the alternatives and recommendations for the situation can be suggested as a remedy. With the client’s agreement, the financial planning recommendations are jointly implemented. The process gets completed only with the final consensus achieved as to who will monitor the progress towards the achievement of desired goals.

These are all the basic knowledge you should essentially have about the financial planning process. Now you would be curious to know whether you yourself can wear the garbs of a financial planner. How you can do financial planning all by yourself that is best personalized for your needs and desires. To find out all that you wanted to know more about financial planning, do check out our next sequel in financial planning.

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