What is Financial Planning? Definition & Process

Financial Planning and Analysis

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Every person thinks about everything in life in advance, he makes plans in advance about what to do and when. Just like every other planning, financial planning is also very important in every person’s life. Every person should always consider it necessary to do financial planning in case of any emergency or obstruction or problem in ongoing life or any work. Why financial planning should be done and how it should be done is explained in detail below.

What is financial planning?

It is the financial planning done for emergency situations or to improve your current life. it helps you to improve your financial condition. in financial planning you can control your expenses and saving to achieve your financial goals. while doing financial planning you have to decide about your future expenses keeping in mind your current life situation. while doing financial planning you should keep in mind all your things and plan your expenses and saving accordingly. you can plan by saving some income from your current position or you can look for different sources for more income. financial planning is very important for you to maintain or improve your financial position.

Steps in financial planning

Make a Budget: – You can make a budget by keeping a record of your daily life. making a budget is very beneficial as it helps you understand the accounts of your month or year. make a monthly budget to control your income expensive and saving. this will help you control your current financial situation and use your income to full fill your goals.
Invest: – You should invest using your income. the advantage of investing is that you can increase your income and get more investment to fulfill your goals.
Save: – Saving is the most important topic. we are taught to save from childhood so that it becomes useful at the time of your need. you and all of us should learn to save some amount or things from the daily life. you should save some amount every week or month so that your income increases, and you get more money to full your goals.
Buy Insurance: – Insurance help a lot in your financial planning. that is why you must buy insurance for your financial security. insurance help you in getting security and longer live to fulfill your wishes and goals.
Financial Education: – This is a method of study in which information about all financial topic is given. this subject of study can help you all a lot and doing your financial planning and with this you can also help others.
Financial Advisor: – This means that you can get suggestions/ advise related to financial planning. if you have any questions about how to do financial planning or any other related questions then you can consult an advisor for that. he helps you regarding financial life and to fulfil your goals.

Who is a Financial Advisor?

Financial advisor is a person who helps you to overcome your financial problems and do long term planning. he helps you to make a budget from your financial expenses and savings. financial advisors are employee by different companies, and they give you advise the facilities as per their rules and regulation. a financial advisor is an educated person with good knowledge, so he/ she tells you about planning in a very easy way.

She helps you to explain difficult words in a simple language and choose mutual funds. apart from that she also helps you in other types of finance related matters. in a simple language a financial advisor helps you in all type of financial income planning. a financial advisor helps you in a planning from your current life to your retirement. you can also become a financial advisor. for that you will have to get a higher education degree related to it. to become a financial advisor, you should have complete knowledge about financial planning, investment, production, insurance planning, and many other such plans.

How to select a Financial Advisor

While choosing a financial advisor you must have a clear idea of your financial goals. a good financial advisor helps you a lot in achieving your goals. the things that you keep in mind while choosing your financial advisor are given below: –

Experience: – Whenever you choose a financial advisor for yourself, do look at his experience. Select a financial advisor keeping in mind how much work he has done till now, how much knowledge he has regarding this. An experienced financial advisor will help you in financial planning and solving your questions very well.
Certification: – Whenever you select a financial advisor you should tell him everything about your financial situation only then he helps you in achieving your goals see whether he prepare a plant and budget for you as per your situation or not
Sensitivity: – while selecting a financial advisor make sure that he understands your current situation or not. see if he is able to help you by understanding your situation or not. if he is giving new planning according to your situation then you can choose that financial advisor for yourself.
Relationship: – see if a good financial advisor maintenance a good financial relationship with you or not. check if he solves all your financial problems or not. you should maintain a good relationship with your financial advisor and talk to him in open environment, you should not hide anything.

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Qualities of a good financial advisor

The hallmark of a good financial advisor is that he is experience and has knowledge of all matters related to finance. a financial advisor should be sensitive and honest towards his clients. he should have a solution to every financial problem of the client, and he should do it on time. he should help the client in financial planning from the present to old age.

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