Financial Planning Definition:
What is financial planning?
Financial planning can be defined as the strategic process of creating a financial plan for an individual or family.
The financial planning process consists of developing an actionable set of steps based on an in-depth evaluation of the individual’s current financial standing and the goals he or she would like to achieve in the future.
Financial planning is typically offered by licensed financial professionals, including financial advisors as well as certified financial planners, but a lighter, less detailed version may be available through some online providers.
Initial Stages
At the early stages of the financial planning process, you’ll need to gather and provide the below information to your financial planner.
- A detailed account of your current financial situation
- Investment or savings account balances or statements
- Current investment strategies and allocations
- Retirement account types (pre- or post-tax vehicles) as well as investment allocations
- Current insurance coverage including life, disability and long-term care policies
Speaking with a Financial Planner
During the initial stages of the financial planning process, you should be prepared to have an in-depth discussion about the specific financial goals you want to achieve.
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This discussion should include topics such as retirement timeframe and the vision of how you want to spend your years in retirement, as well as the desire to fund other goals and at what rate.
Once this information is gathered by a financial professional, an accurate, and ultimately beneficial, financial plan can then be created.
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