Financial planning is not a one time event, but rather an ongoing process. Reaching your financial goals is like a trip. While there are many reasons you need a financial plan, here are six financial planning tips to get you started.
If you don’t know your destination, how will you know where to go. A financial planning goal is something that has a time frame and that can be quantified. The financial planning process will assist you in defining and quantifying your goals. This will help you plan for aspirations like a comfortable retirement.
Determine investment allocation
When making a financial plan, it is critical to make proper investment allocation. The outgrowth of your financial plan should be a plan for the allocation of your investment assets across all of your accounts. The investment allocation should reflect the goals that you are trying to attain as well as your tolerance for investment risk.
The financial planning process will help you identify how much you will need to save periodically for each of your goals. Whether you want to fund your children’s school education, save for retirement or buy a new house, most financial goals need periodic saving.
Financial panning will address issues like life insurance, do you have the right kind of policy for your situation?. do you have disability and long term insurance care, do you need more coverage?
A good financial planner will do for you what you cannot do yourself. He will apply his expertise, experience and training to suit your unique financial needs. Take note to always hire a fee only financial advisor, someone who does not earn a commission based on selling you a financial product, this eliminates a huge potential conflict of interest.