Learning some key components of financial planning can help people have more capital on hand to help them achieve their short- and long-term goals
Financial planning has become a catchphrase
in recent years, and it’s something many consumers may not fully understand. Learning some key components of financial planning can help people have more capital on hand to help them achieve their
short- and long-term goals. A 2018 study
commissioned by GuideVine that polled 1,000 Americans 30 and older about their finances found that
many lack knowledge of basic financial terms. In addition, the study found that numerous people feel completely lost in regard to having a solid plan with their money. Financial planning can be intimidating, but learning the basics of
sound money management can help people secure their financial futures.
According to the online learning resource WiseGeek, financial planning is a process of setting objectives, assessing assets and resources, estimating future financial needs, and making plans to achieve financial goals. Investing, risk management, retirement planning, tax requirements, and estate planning
are key components of financial planning.
To get started with financial planning, the financial guide and online resource Ramsay says individuals will need to see where they stand financially, establish financial goals
and create a plan to
reach those goals. While
a person can create his
or her own financial plan, oftentimes the help of a financial planner can make sure that all avenues are being explored, especially
for financial novices. It’s important to note
that financial planning may mean different things to different people. For some, planning may revolve around saving for a child’s college tuition but still having enough money left to retire. Another person may be looking to save extra money to invest in a business venture. Others who are living paycheck to paycheck may need help reevaluating their spending so they
can grow their savings. One of the key
components of financial planning is to begin doing it as soon as possible.
A financial plan can be instituted at any age, and goals can be revisited
as life changes occur.
Financial planning strategies are something anyone can learn and utilize to secure their financial futures.