What is Financial Planning


What is Financial Planning?
Financial planning is a thorough process that involves setting up future financial aims and goals based on the present financial status and the resources at hand while keeping inflation in mind. Objectives can be categorized as short-, mid-, or long-term.
 
Types of Financial Planning?
•Insurance planning: Safeguards against unforeseeable hazards related to a person's life, such as death, illness, disability, unemployment, etc.
•Investment planning: Aids in setting and achieving future, realistic short-, mid-, and long-term goals using the resources at hand.
•Tax planning: Decreases stress and tax obligations until the fiscal year's end.
•Retirement planning: helps to plan and ensure a financially independent and healthy lifestyle with good corpus accumulation.
•Liquidity planning: helps with future cash flow availability based on current income and expenses keeping inflation as a factor.
•Children’s future planning: helps to plan investment of your children’s needs and goals keeping inflation as a key factor.
 
Importance of Financial Planning?
In order to attain your future goals, financial planning assists you in organizing and tracking your income, expenses, liabilities, and assets using a step-by-step structure and procedure while taking the unanticipated risk, available resources, and inflation into consideration.

Here are the Benefits of Financial Planning:
•Provides financial security and a sense of freedom.
•Helps achieve future goals and objectives.
•Protects from financial uncertainties and risks.
•Helps maintain a record of income and expenses for better investment planning.
•Guarantees adequate funds and maximum utilization of available resources. 

Steps of Financial Planning?


Conclusion
Setting your goals and objectives aligned with available resources, and external factors help in creating an efficient financial plan to prepare for unforeseen risks and uncertainties and achieve your goals and objectives smartly, ultimately providing financial freedom and security to yourself and family.


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