Your Personal Financial Planning Guide
In the simplest terms, financial planning is the art of controlling one’s economic environment to meet ones needs and aspirations. In broader usage, a financial planning is an intensive analysis of an individuals current and future financial status with the use of key factors such as savings rate, maturity date, balance amount, expected returns, risk tolerance, income trend and reinvestment strategy. Financial planning also involves setting aside a reserve fund for sudden unexpected expenses. In fact, financial planning has become a critical skill for people of all walks of life to meet their long-term financial objectives, whether they be paying off credit card debt, saving for a college education or retirement, or simply buying a new home. But what really makes financial planning so difficult is not only its theoretical intricacies but also its implementation.
As said before, financial planning is an exhaustive process that requires comprehensive analysis of ones current financial position, future anticipated income and assets to determine both long-term and short-term financial objectives and strategies, as well as to forecast long-term and short-term market interest rates. The ultimate objective of any financial plan is to achieve a balanced portfolio of assets, liabilities and funds to achieve a predetermined financial goal. A financial plan should be in place to cover all investment objectives and should include a well-planned and executed financial plan.
When it comes to achieving your financial goals, financial planning is an important skill to master because it allows you to set aside resources to achieve your goals. In other words, it allows you to know where you stand today financially and gives you a clear picture of your future performance. With your goals in mind, you will be better equipped to achieve them.