Financial planning more important today than it has ever been. This is true whether you are a 20-year-old student, a 35-year-old parent with a mortgage loan, or a 50-year-old thinking about retirement.
In fact, personal financial planning is a lifelong activity, because everyone’s financial goals and plans will change over time. For example, a young graduate’s priorities may be to find his first job, pay off a study loan, get married, and buy his first property. When he grows older, his focus is likely to shift towards family healthcare needs, children education, retirement and estate planning.
It is important to develop a personal financial plan which guides your overall financial decision. For example, investment plans which involve asset allocation that determines the percentage of an investment portfolio to be allocated to bonds, and to stocks, or other investments.
While it is possible to develop your own personal financial plan, in reality most people don’t follow consistent plans in making their financial decisions. This is where financial planners can add value by helping their clients to develop, implement, monitor, and review their financial plans. A good financial planner should work closely with their clients to set and achieve goals, and make adjustments as their personal goals, financial status, family circumstances, and economic climate change.
Financial planning can done by developing a comprehensive financial plan, which covers all of a person’s financial objectives, including investment, risk management, retirement, estate planning, tax, etc.
Alternatively, special needs planning can be used to meet specific needs (eg. parents saving for their children’s tertiary education). Even though the focus is on a specific need, a good planner will also consider the bigger picture. Special needs planning often lays the groundwork for a comprehensive financial plan.
If you need help to develop your own personal financial plan, please contact your FLA Organization financial planner today.
