In the simplest of terms, financial planning is making a plan to achieve certain financial goals. In simpler terms, financial planning is about making a plan to have enough money for all expenses and that include your future living expenses as well. Financial planning should be made carefully because there are different ways of reaching your financial goals, some work better than others and some even require you to get a loan.
In general, a financial planning is a detailed analysis of an individuals current and future financial situation by taking into consideration present known facts to forecast future income, assets and expenditure. The process of financial planning includes determining what kind of lifestyle and savings plan will be beneficial in meeting future needs, determining your long term goals, setting and sticking to realistic goals and designing and implementing a plan to meet those goals. All these things have to be planned and implemented in order to reach specific life goals. Although financial planning can be quite a difficult task if one has no idea of what they are trying to accomplish, but with a little effort and research you will definitely be able to come up with good financial strategies to follow.
It is important that when planning for financial goals you set yourself a realistic timeline so that you know what kind of lifestyle you will be living once you have achieved your retirement goal. One aspect of financial planning is to make sure you start saving early enough to reach your retirement. Research shows that those who initiate savings early enough usually finish their retirement earlier than those who wait until later. To summarize, financial planning is not only important for your immediate and distant future, but it is equally as important in your retirement planning, as you will need all the extra income to support your lifestyle and other monetary needs.