What Exactly is Financial Planning?

The term “financial planning” often intimidates people, especially those who think financial planning is for the high-income earner and the rich. But is this true? If not, what is it actually? Generally, financial planning involves taking a broad view of one’s financial affairs covering many areas of wealth management, and then going through a step-by-step process to solve financial problems and achieve financial goals.

What is Included in Financial Planning?

Here are some core elements of financial planning:

	Cash flow management, involving:
	assessing your current financial net worth (what you own minus what you owe). This will generally tell you whether you are on your way to financial freedom or financial disaster budgeting eliminating debts building savings.
	Investment planning
	once you have determined the amount of money you would like to save, you should consider where to put your savings with the aim of receiving a higher return than your normal savings account. An investment strategy has to be mapped out so that you will have greater success in meeting your stated financial goals.