Question

what are the main processes of personal financial planning? and what it's importance.

Answer 1

The importance of a financial plan is that a person feels more in control over a situation that they are in life. They feel that they can easily handle any unforeseen event in life like a loss of lived ones, disability or loss of a job or a separation. They feel more in control of their lives and can also enjoy life before retirement as a financial plan gives them the power to do so. It helps an investor meet his current financial needs and also plan for the future needs .

The process of a financial plan begins with a budget , careful planning helps an investor to achieve it's goals.

Financial planning is a six step process:

1. Identify the current financial position .

2. Develop the financial goals

3. Identify a course of action.

4. Set up a plan of action.

5. Evaluate the alternative plans of action.

6. Creating and implementing the plan of action.

7. Revise and revisit the existing plan.