The term "financial planning" often intimidates people, especially those who think financial planning is for the high-income earner and the rich.
But is this true? If not, what is it actually? Generally, financial planning involves taking a broad view of one's financial affairs covering many areas of wealth management, and then going through a step-by-step process to solve financial problems and achieve financial goals.
What is Included in Financial Planning?Here are some core elements of financial planning:
Cash flow management, involving: assessing your current financial net worth (what you own minus what you owe).
This will generally tell you whether you are on your way to financial freedom or financial disaster
-budgeting
-eliminating debts
-building savings.
-Investment planning
once you have determined the amount of money you would like to save, you should consider where to put your savings with the aim of receiving a higher return than your normal savings account.
An investment strategy has to be mapped out so that you will have greater success in meeting your stated financial goals.