Financial planning is the process of carefully organizing personal finances to meet an individual’s life goals through wise management of assets, debt, budgeting and investments over the short and long-term.
Components of Financial Planning:
- Retirement planning helps project savings needed to fund retirement by strategizing contributions to employer/personal retirement accounts.
- Estate planning utilizes trusts, wills and other legal measures to safely transfer assets upon death according to one’s wishes.
Example Benefits:
By meticulously crafting a financial plan factoring unexpected expenses, steady income streams after retirement were assured through disciplined savings and windfall protections since youth.
Significance:
Prudent financial planning provides piece of mind knowing finances are organized to prepare for life events while efficiently meeting obligations and making informed financial decisions aligned with personal objectives and risk tolerance.