Financial Planning involves a detailed analysis of an individual’s income and a prediction of his financial status in the future. A professional financial planner will look at your past spending habits as well as your income to pinpoint any trends or areas of concern.

Financial planning is a complex procedure which requires detailed attention to even the most minute details.

Here are some common steps that a professional financial planner will take to help individuals set a long-term plan:

  • Set goals for short, medium and long periods of time (i.e., short-term being 1 to 6 months, medium-term being 1 to 2 years, and long-term being until you reach retirement).
  • Document details of any income, assets, or liabilities you and your family have. Organized record keeping can make a huge difference.
  • Establish the financial position. Determine how far you are from reaching your various goals.
  • Establish the plan by creating a step by step “map” which will help you accomplish your various goals - short-term, medium-term, and long-term. Creating this plan may involve building in a backup plan in case anything does not go as originally thought.
  • Follow the plan. Once the plan is well thought out and established, it is important to follow it and try not to deviate from it.
  • Monitor and reassess. Once in place, your plan still needs to be monitored closely. Financial planning requires occasional “rethinking” in order to make it as efficient as possible.

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