What is Financial Planning?

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What is Financial Planning?

Financial Planning can mean many different things to many different people, typically as a person goes through their life they will be faced with many different stages of Financial Planning such as:

• Saving for a house deposit
• Mortgage Planning
• Saving for a Family
• Family Protection ensuring loves ones are looked after
• Saving for retirement, ensuring pension income will be sufficient
• Getting ready for retirement, choosing the right annuity
• Estate Planning & Tax planning

This is just a very broad example of how someone’s priorities may change throughout their life, now lets consider the process.

The Financial Planning Process

Financial planning is a process of setting objectives, assessing assets and resources, estimating future financial needs, and making plans to achieve monetary goals. Many elements may be involved in financial planning, including investing, asset allocation, and risk management. Tax, retirement, protection planning including life assurance and estate planning are typically included as well.
Financial planning plays a starring role in helping individuals get the most out of their money. Careful planning can help individuals and couples set priorities and work steadily towards long-term goals. It may also provide protection against the unexpected, by helping individuals prepare for things such as unexpected illness or loss of income.
As mentioned Financial planning may mean different things to different people. For one person, it may mean planning investments to provide security during retirement. For another, it may mean planning savings and investments to provide money for a dependent’s college education. Financial planning may even involve making career-related decisions or choosing the right insurance products.
Many individuals choose to use the services of financial planners to help them reach their goals. A financial planner is a professional who provides advice and guidance for a wide spectrum of financial planning issues. Financial planners may or may not be certified and offer varied levels of experience, it is important to make sure you choose a financial adviser that is right for your needs, care should be taken to make sure you research local advisers and prepare questions you want to ask them in advance.
Though a financial planner may make developing a financial plan easier, hiring one is not at all a necessity. There are many books, computer programs, and other resources available to help individuals with financial planning. Furthermore, there is a wealth of related information available on the Internet. The decision to hire a financial planner may depend on many things, including the financial worth of the individual, his or her goals for the future, and the amount of research the individual is willing to perform.
Their have been many changes put in place and are due to be put in place by the FSA, The Financial Services Authority. When it comes to choosing a Financial Planner must people consider an Independent Financial Adviser (Click this to see a full description of what an Independent Financial Adviser is) to be the must suitable to meet their Financial Planning needs, this is because they provide unbiased advice because they are not tied to a particular provide and so can recommend products as services from the whole of the market.
All too often, people delay planning for the future. They may feel such planning should take a back seat to staying financially afloat in the present. However, even those living from paycheck to paycheck can benefit from financial planning by creating a budget. A budget can be used to determine what is actually spent each month and find ways to trim or even eliminate unnecessary or out-of-control expenditures.
The right time to create a financial plan is right now. No matter what your income level or what your hopes for the future, you need a solid plan to achieve your goals. Drifting through life without carefully set goals and well-researched methods of achieving them is a recipe for disaster. To enable your money to offer you more of what you want out of life, start creating a financial plan today.