The art of financial planning involves identifying your financial needs, managing your money, compiling a portfolio to support your objectives, and evaluating your options for financing your objectives. If you are like many people throughout the world, you will spend some portion of your life in what is called active retirement. Financial planning helps you meet your financial objectives over the course of your lifetime.
The purpose of this article is to provide you with the information that you need to make an informed financial planning decision and to provide you with the benefits of hiring a professional financial planner.
Process of financial planning
- The first step to financial planning is planning your retirement.
- Second step is to develop a comprehensive financial planning strategy.
- Third step is to set and accomplish your investment and retirement objectives. Your third step should identify the current state of your financial situation and your long term financial goals.
- The fourth step is to utilize effective investment strategies to achieve your investment goals.
Benefits of financial planning
Some of the most obvious benefits of financial planning are those that directly impact the way we live our lives.
1. Save from disaster :
When we are making financial decisions, we are often faced with situations that require us to make quick decisions. This is often necessary in order to prevent financial disaster or to correct an on-going situation.
2. Maintain positive self- image :
Another aspect that is directly related to the quality of our lives is the way that our finances affect our mental health. Because our financial situation is a mirror image of our own sense of self-worth, taking proper control of our finances and setting and achieving goals helps to build and maintain positive self-image.
3. Make us responsible :
When we take responsibility for our own finances, it also allows us to be more responsible for other areas of our lives. By focusing on goals and establishing financial goals, people are more likely to take on challenging goals and fulfill them successfully.
4. Help us achieve long term goals :
A major benefit of financial planning is the creation and achievement of long term goals. When a person creates a written business plan, they have outlined a road map to their success. The benefits of having financial planning actually help you to guide in the journey that is immeasurable.
5. Make you aware :
Once you are able to make financial plans, you can use them as a guideline when making major decisions throughout your lifetime. You will know exactly where you are going before you even begin.
6. Make you meet your needs :
Of course, the greatest benefit of financial planning is that it helps you achieve measurable goals. As you set financial goals, you are forced to think about your personal needs. Each person’s needs are unique. Therefore, the only way to really know if you’re making the right choices is to take the time to evaluate how you are accomplishing your goals
Things to consider when hiring financial advisor
- When a financial planner pushes for more control over your money or tries to get you to refinance your home loan, keep in mind that he may not have the appropriate training for the job.
- Education and licensing are important factors when hiring a financial advisor.
- In some states, financial advisors must be licensed or registered with the state before they can handle financial planning issues. It is always a good idea to choose an advisor with experience.
- Although highly qualified financial advisors can sometimes create financial problems, experience can prevent unnecessary conflicts in the future.
Lastly, to get started with your own financial planning, take the time to get informed. Take advantage of online resources that offer free tips and advice. Also, consider taking a class to enhance your knowledge of money management. Regardless of the decision you make, take the time to educate yourself on the topic.
Financial planning helps you meet your financial objectives over the course of your lifetime.The benefits of financial planning are tremendous and they can help you in all areas of life from your financial needs to your professional life.