Financial Planning to Help You Change Your Life for the Better



1x1.trans Financial Planning to Help You Change Your Life for the Better

Financial Planning


This post on financial planning is authored by Robert, a FinanceWalk tribesman.

It is a very commonly heard problem that people can’t find ways to keep money.

This throws their finances out of order and sometimes makes recovery impossible. Situations like these can only be handled by formulating proper and realistic financial goals.

You may have a very busy life, but it’s equally important that you take time out of your hectic schedule to attend to your goals as well as establish them.

The following are some steps that you need to make sure your financial goals are ready.

Steps of Financial Planning


1. Formulate a budget

Want an idea of your overall financial situation? Budgeting comes very handy here.

With a budget, you get to know whether your expenses match your income. Higher-than-income expenses can hurt your finances very badly.·

2. Go for short term goals

It’s better to have short term financial goals if month-ends bring budget deficits for you.

This will give you an opportunity to review your expenses and make the necessary decisions that will bring the expenses under control.

Balancing your personal budget is all the more important.

3. Assess your needs and goals

What does your life want you to do? It’s important that you understand your needs and requirements well. Try to evaluate your present condition and what the future may bring you. For example, buying a house or saving up money to boost cash funds for emergency purposes.

4. Write down your financial goals

There has to be financial goals that you want to achieve.

Go ahead and list all of them.

Don’t forget to list budget balancing as a goal as that’s the most primary thing to do before you can make things work in your favor.

5. Categorize your goals

Now that you have your goals on paper. Make 2 separate lists and divide them under short-term and long-term goals. Your short-term goals will include constructing emergency funds etc. whereas buying a house will fall under the long-term goals.

6. Create appropriate deadlines for financial planning

 You need to associate your goals with deadlines of your choice.

Don’t think of it as an easy task.

You’ll face enormous issues and things may go haywire if you’re unable to meet your deadlines.

This is because your plans will fall apart.

Therefore keeping head straight is of paramount importance while attaching deadlines to goals.

Don’t let your deadlines make things suffocating for you.

The purpose is to help you achieve your goals smoothly and not otherwise.

The aforesaid will help you set your financial goals without trouble provided you’re dedicated enough towards them.

Make sure you’re monitoring your progress on a regular basis.

This will tell you if or not you’re deviating from your plan, which could be really disastrous.

This will also prompt you to make the necessary adjustments as and when the need arises.

Financial planning is a great way to bring oneself back together as well as reduce the chances of being prone to falling apart over and over again. Every good decision made will only strengthen your position as you look forward to a better and financially secure life.

Author Bio : Robert has been a contributory writer for many financial websites. His interests include writing columns and counseling people on subjects like finance,debt, investment and moneymaking ideas for a better living .

What is Financial Planning?


Due to ever changing technology, inflation and increasing disposable income, it’s need of the hour to do financial planning for everyone. So, I thought it’s right time to write on – What is financial planning.

In my last article, I wrote the secret to become a successful financial advisor.

The base of any financial decision starts with you first; be it saving, spending, budgeting, investing, or planning for future.

It starts with you and your goals.

In this post, I will explain what is financial planning in simple words.


What is Financial Planning


“Financial Planning is the process of meeting your life goals through a systematic and disciplined arrangement of your personal finances.”


Financial Planning 101

With the above definition, we realize three main things.

  1. Financial Planning is a Process
  2. It’s about Your Life Goals and,
  3. It’s about disciplined arrangement of your personal finances.

Let’s see the first step in this process.

What is financial planning

Financial Planning is a process consisting different steps. Look at the image below.

1x1.trans What is Financial Planning?

What is Financial Planning

1.    Determine your current financial situation

You may be a salaried person, a professional or a businessman, check your current financial situation. Where are you now?

  • Do you have enough savings and investments to back your aspirations?
  • Is your salary enough to pursue your personal and financial aspirations?
  • Are you able to manage your home loan and personal loan responsibilities?

Ask these questions to yourself. Be very clear and honest with your current financial situation.

2.    Develop your financial goals

What financial goals you want to achieve?

  • Retire at 50?
  • Be debt free at 40?
  • Want to invest in a second home?
  • Want to go abroad for further studies?
  • Want to send your children abroad for further studies?
  • Daughter’s marriage?

The list is endless.

Where to start?

Start with important goals first, that can give you financial independence. How about being debt-free at 40? I know some people who are debt-free at 35.

It’s possible and it needs a disciplined and systematic planning.

3.    Identify alternative courses of action

What alternative actions you can take to achieve your financial goals?

I believe some actions like learning good saving habits, learning your relationship with money, living frugally and keeping positive mindset are some of the ways that help you achieve your financial goals.

4.    Evaluate alternatives

Consider your current life situation, your personal values and economic factors. Also assess risk and time value of money of each alternative.

Here, you should check different products available in market and select the best ones based on your need.

You may need to do some changes in your lifestyle so that you achieve your financial and life goals that are close to your heart.

5.    Create and implement your financial action plan

Once you take all the five steps mentioned above, you will get a clear idea about your financial goals and what you need to do to achieve them.

The key words here are implementation and action.

The plan remains on paper if you don’t implement it. So take the first step and rest will follow.

6.    Review and revise the financial plan

As you go and implement your financial plan, you should revise your plan periodically, every 6 months or whenever you achieve a milestone.

This step is the last step in the financial planning process.


How personal financial planning is different from corporate finance?


The jargon used are same but meaning is different.

For example, when you use the word ‘Net Worth’ in corporate finance, it’s about company’s capital plus reserves and surplus.

Likewise, a person’s net worth is his total assets minus total liabilities.

Can I create my own financial plan?

Yes. If you follow these steps and do a bit of calculation, you can create your own financial plan and you don’t need to hire any financial planner for this.

I hope after reading this article, you understood – what is financial planning.

Feel free to share your thoughts about financial planning with me in ‘Comments’ section below.