What is Financial Planning?

financial planning | pfaasia.com

There is very wide definition of financial planning.

First of all you have to know who the audience or client is. Is it an individual or family, or a business or a large organization?

Financial planning for individuals and family generally covers:

  1. Understanding your financial goals,
  2. Planning for life stages,
  3. Wealth creation or passive income generation,
  4. Expenses management,
  5. Risk management or insurance,
  6. Investments,
  7. Tax planning,
  8. Retirement planning,
  9. Estate planning,
  10. Budgeting,
  11. Saving money,
  12. Credit and debt management,
  13. Real estate and mortgages,
  14. College savings and education planning,
  15. Personal finances,
  16. Other financial tools.

As for businesses or organizations, besides individual family financial planning aspects, we have to assess the followings:

  1. Assess the business environment [SWOT Analysis]
  2. Confirm the business vision and objectives [Vision and Mission]
  3. Identify the types of resources needed to achieve these objectives [Resources]
  4. Quantify the amount of resource (labor, equipment, materials) [Assets and Human Capital]
  5. Calculate the total cost of each type of resource [Liabilities and Costs]
  6. Summarize the costs to create a budget [Budget]
  7. Identify any risks and issues with the budget set [Risk Management, Audit and Corporate Insurance]

For detail information, you might want to engage professionals in respective areas for advice.

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