Personal Financial Planning

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Personal financial planning is the tool to help us achieve our fininancial goals and no one is spared from the need to develop personal financial plans. Whether it is a fresh graduate or a person about to retire, everyone faces fresh financial challenges constantly. Being able to anticipate what we hope to accomplish financially gives us an edge and higher possiblity of success compared to just reacting to financial happenings as they unfold.

Careful Planning of our finances is very important in order to achieve our goals in life. Not only does sound planning improve our standard of living, it also helps us stretch our buying power and accumulate wealth in the most effective way. In periods when the economy is slow, planning also helps to secure the future. The essence of financial planning is thus to provide us with a perspective of what to do with our money in order to attain our financial goals.

There are six steps in the process of financial planning. They are can be summarised as below:

• Definition of financial goals
• Developing financial strategies and plans to achieve goals
• Implement plans and strategies
• Monitoring progress
• Evaluating results
• Revising plan if necessary