Financial Planning
What is Financial Planning?
In general usage, a financial plan is a comprehensive evaluation of an individual's current pay and future financial state by using current known variables to predict future income, asset values and withdrawal plans.[1] This often includes a budget which organizes an individual's finances and sometimes includes a series of steps or specific goals for spending and saving in the future. This plan allocates future income to various types of expenses, such as rent or utilities, and also reserves some income for short-term and long-term savings. A financial plan is sometimes referred to as an investment plan, but in personal finance, a financial plan can focus on other specific areas such as risk management, estates, college, or retirement.
Importance of Financial Planning
Financial Planning is process of framing objectives, policies, procedures, programmes and budgets regarding the financial activities of a concern. This ensures effective and adequate financial and investment policies. The importance can be outlined as1. Adequate funds have to be ensured.
2. Financial Planning helps in ensuring a reasonable balance between outflow and inflow of funds so that stability is maintained.
3. Financial Planning ensures that the suppliers of funds are easily investing in companies which exercise financial planning.
4. Financial Planning helps in making growth and expansion programmes which helps in long-run survival of the company.
How to plan your finance? Hopefully, you’re now convinced that you definitely need a piece of the action. What next? When you actually get right down to it, financial planning consists of a series of steps. This section examines each of these steps in detail. 1. Identify your current financial situation 2. Identify your goals 3. Identify financial gaps 4. Prepare your personal financial plan 5. Implement your financial plan 6. Periodically review your plan
Description Financial planning is a roadmap for your financial journey such as buying a house, car, education for children, wealth creation and so on. Plan & analyse your personal finance with Recipe tools and find the best suggestions. Url:- https://recipe.finology.in/financial-planning
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