A financial plan is a comprehensive picture of your current finances, your financial goals and any strategies you’ve set to achieve those goals. Good financial planning should include details about your cash flow, savings, debt, investments, insurance and any other elements of your financial life.


It provides direction to your goals or dreams. Financial planning helps you understand your goals better in terms of why you need to achieve these goals and how they impact other aspects of your life and finances. Planning encourages you to manage inflation.

Frequently Asked Questions

What are some examples of financial planning?

  • Your personal information e.g. Age, income, tax filing status, children, etc.
  • Your financial goals and big picture overview (assets, debt, etc)
  • A debt elimination plan.
  • An investment plan (to build assets)
  • Personal insurance.
  • An estate plan.
  • Income tax strategies.

What does financial planning mean?

A financial planner helps clients (individuals, families, and businesses) create programs to reach their long-term financial goals. They may offer broad financial advice or specialize in an area such as investments, taxes, retirement, or estate planning.

Why do we need financial planning?

Financial planning is a step-by-step approach to meet one’s life goals. A financial plan acts as a guide as you go through life’s journey. Essentially, it helps you be in control of your income, expenses and investments such that you can manage your money and achieve your goals.

What is financial planning and types?

Some of the important concepts to understand in financial planning are Goals, financial goals, investment, asset class, asset allocation, review, restructuring, long-term goals, short-term goals, risk assessment, etc.

How many types of financial planning is?

There are primarily three types of financial plans that include: A short-term financial plan is determined for a time span of 1 year. This plan takes into consideration your current income and other financial resources at your disposal and your needs.

What are the 4 elements of financial system?

Most financial management plans will break them down into four elements commonly recognised in financial management. These four elements are planning, controlling, organising & directing, and decision making.

What are the 6 components of financial planning?

Major key elements are Cash-flow management, Investment management, Tax planning, Insurance assessment, Retirement planning, and Estate planning.

What are the 3 major components in the financial planning process?

Since everyone has a different financial situation, every plan will look different. However, almost all plans include life and financial goals, an analysis of the current finances, and an outline of how you will accomplish the goals you’ve set.

What are two elements of the financial plan?

Financial plan consists of four elements. These elements are (i) profit and loss projection, (ii) projected balance sheet, (iii) projected cash flow, and (iv) break-even analysis.

What is the most important part of financial plan?

The most important initial element in financial planning is Budgeting. Setting a budget is relatively easy; it is more difficult to stick to it! However, having the discipline to take the time and care to record and reconcile your expenditure in some way is what counts

What are the 3 A’s of financial management?

Summing up, financing is nothing more than combining 3A’s together i.e. Anticipation, Acquisition and Allocation i.e. predicting future needs, acquiring the desire sources of funds and their distribution as per the budget.

What is a financial system example?

In a global view, financial systems include the International Monetary Fund, central banks, government treasuries and monetary authorities, the World Bank, and major private international banks.

What is the most important step in financial planning?

Monitoring Your Financial Progress. Regular communication and follow-up are important steps in the financial planning process. In fact, creating the plan is really just the first step. You’ll have ongoing contact with your planner to find out whether you are on track to meet your financial goals.

What is the difference between financial planning and budgeting?

Budgeting looks at what’s happening with your financial picture now and helps you prioritize how you’re spending and saving your money on a regular basis. Financial planning, on the other hand, is a broader look at your entire financial picture over time.

What is the main role of a financial manager?

As Finance Manager, your responsibilities will include overseeing end-to-end finance operations, financial planning and analysis, balance sheet reconciliations, looking to make improvements to procedures and controls, as well as ad-hoc projects and requests as and when they come up.