Importance of Financial Planning

Fulfilling the future needs and improving the standard of living depends on the plans you make today. So what’s your plan for the future?

You know what your current income and expenses are, but you can’t see what the future will bring or if you’ll have financial challenges down the road.

Financial planning is an important tool for any individual because it allows you to see the big picture, set short- and long-term goals and map out the financial future as best as possible.

Financial Planning is the process of determining ways to earn, save and spend money and the amount you need to earn, invest and spend. By planning your finances, you manage your money such that you reach your life goals.

Here are some benefits of engaging a Financial planner for your investment and financial planning needs:

Determining Your Current Financial Situation: The first step in the financial planning process involves taking a detailed look into your current financial situation. This means examining your savings, income, debts and current living expenses. A professional financial planner will collect a variety of financial documents, such as a list of debt balances and current assets, and determine where the person stands financially and what changes will need to be made to reach specified goals.

Developing Financial Goals: Goals need to be SMART - Specific, Measurable, Achievable, Realistic and Time-bound. Even in your Financial plan, you have to chalk out goals that are achievable keeping in mind factors such as your income, expectation of return and goals. Financial planner would help you do this. These goals may be different for everyone, such as getting out of debt before retirement, building an emergency fund or saving enough money to pay for the children’s education etc.

Creating Alternative Courses Of Action: Good decision-making requires having an alternative course of action which you can turn to when a main course of action does not work out as intended. Once you decide what your goals are, your financial planner would help you choose specific investment options to achieve it. Your planner would help you choose the appropriate Financial instrument based on your risk-return requirement and match it with the appropriate Financial instrument.

Evaluation of Alternatives: The next step in the financial planning process involves evaluating possible courses of action. When evaluating courses of action, it is important to consider your life situation, values and the current economic conditions. You should also be aware of the trade-offs of their decisions. For example, a person may choose to use their money to pay off their mortgage but in turn, will not be able to go on vacation this year. Decision making will be an ongoing part of your personal and financial situation. Thus, you will need to consider the lost opportunities that will result from your decisions.

Implementation of a Financial Plan of Action: Once financial goals have been specified and alternative courses of action created and evaluated, it is time to develop an action plan. A financial action plan involves finding ways to achieve financial goals. Goals should be listed in order of importance and once the most prioritized goal has been completed, start working towards the next goal on the list. A professional financial planner can help put a financial plan into action.

Reevaluation & Revising Your Financial Plan: Financial planning does not end when the financial plan is created. It requires regular review and reallocations depending on the market situation and changing needs for achieving your financial goals. A financial planner would suggest revisions on the basis of his expertise and market situations.

The role of a fitness coach is similar to the role of a financial planner– both carry expertise, both ensure a sound fitness plan whether physical or financial and both help in monitoring and ensuring the effective progress of the plan during the long term.

Thus, financial planning provides direction and meaning to your financial decisions. It allows you to understand how each financial decision you make affects other areas of your finances.

We “GIIS Financial” have qualified professionals of CFA/CFP to cater Personal Financial management in very professional manners and we have our complete financial planning system and tools with cutting edge technology.

Start your financial Planning with us today!

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