Financial Planning

November 17, 2008 by  
Filed under Featured, Investments

Financial Planning refers to the process of assessing your current financial conditions and plan to efficiently save money to meet your future expenses or your financial goals. A proper financial planning is very essential for any Individual or Business to reach his/its personal/ business (financial) goals. It would help you to properly manage your money and save wisely for future.


Financial Planning for Individuals

A proper financial planning helps an Individual to learn about his future expenses and save money to meet those financial obligations. The planning may differ from one person to another based on his financial goals and risk level. For instance a person who falls under the low-risk level can invest in fixed rate deposits in Bank/ Post Office etc. On the other hand a person with high risk capacity can resort to mutual funds/ equity funds where the return is not fixed.


Financial Planning for Businesses

Financial Planning plays a vital role in running a successful Business. It helps a business to identify its assets/ cash in hand, liabilities, future expenses etc. and how to properly allocate funds to meet those expenses. Without a proper financial plan a Businessman will find it difficult to meet the expenditures and may end up in losses.


Seeking the service of a Financial Planner


A Financial Planner is a qualified person who identifies individuals’ future expenses and advises a strategy that would help them to meet their financial goals. Some of the common financial goals may be as follows:


a) Saving for your marriage expenses

b) Retirement Planning

c) Buying your Dream Home

d) Investing for your Child’s Education

e) Reducing your Tax Burden thru appropriate Investments

f) Insurance Planning


A Financial Planner may charge a fixed fee (consultation fee) or provide free consultation and receive commissions based on your Investments. Before consulting any financial planner find out about their experience level (years of service) or credentials (happy clients). The best option would be to approach a well known financial planning agency in your locality or also the one recommended by your friends. A new consultant may not be able to match the services of a veteran. Disclose your financial obligations clearly which would help the financial planner to offer a proper advice. Ask questions whenever required to clear off your doubts.


A Financial Planner who charges a fixed fee will be in a better position to suggest various Investment Ideas while compared to the one who receives commission based on your Investments as he might try to convince you in selling their financial products.

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