CFP|Financial Planning

An individuals' need differs widely throughout various phases of life. Needs may vary based on a set of situations an individual is passing through. Therefore it's imperative to adopt a step by step view of a human life cycle.

The so called phases of human life largely determine the requirement phase. In general, the various aspects of financial planning are clubbed together comprehensively to form a financial plan. An in depth analysis however may present an altogether different view. There is a possibility that many of the listed issues do not need immediate attention of an individual. As mentioned earlier, human needs are situational and governed by phases of life. For instance someone in middle age may well be

concerned with income tax issues and investment issues or insurance issues or estate planning issues and retirement planning issues.

For handling issues which require immediate attention, it's important to focus on the concept of immediate and long term set of goals. At a given stage of your life, there could be certain goals which are most important to you. To sum up, you should focus not so much on your age but, rather, on the events that have financial significance to your life.

Following are some of the events which are likely to impact an individual's life:

• Retirement

• Marriage and subsequent responsibilities

• Raising a family

• Buying/Selling Property

• Career

• Starting a business

Addressing these varied issues which occur over a course of different life phases in your life requires proper and targeted approach towards understanding and prioritizing requirements. Proper analysis and focus can help you assess and handle the existing situation or phase of your life. Step by step approach enables an individual to prioritize the goals of your life and segment it under what is required immediately and what can be put on hold for certain duration. Since timing plays a crucial role in the process of financial planning, step by step approach will most definitely provide you a distinct edge towards attaining your long term and short term financial goals.

The aim of financial planning is to address the financial issues of an individual both in terms of long term and short term goals based on gauging the requirements, basis the impact of various events as summed up by an individual. A financial plan guards you against the consequences of financial insecurity.

Consider a scenario where an individual just started his professional career. The first thought from profession point in your mind would be to maximize your income and achieve set goals towards safe retirement. Step by step approach towards financial planning enables you to handle such events effectively, since you are rightly aware about your immediate needs and long term needs.

The final stage of setting goals, then, is to prioritize the goals that you have identified. The distinct approach towards attaining Short term v/s Long terms goals forms the very essence of step by step approach towards financial planning. Since short term goals require your immediate attention they form part of the step which needs to be handled before moving forward to long term goals. However, at the same time it's important to ensure that delaying addressing long term goals such as in case of retirement planning may cause you significant problems down the line. Similarly,

putting off certain goals is potentially catastrophic. For instance neglecting to obtain

adequate life insurance and disability insurance is a particularly hazardous

temptation which can lead to adverse circumstance in long run.

Financial Planning Expert Guidance