Financial Planning Is for Everyone

When you go to the bank, unit trust or insurance company these days, the word financial planning seems to be the new buzz word popping up at customers or clients. But, what actually is financial planning? Is it strictly for those who have a lot of money to invest, or is it for those who want to buy insurance or unit trusts?

Anyone who has financial challenges to solve or financial goals to achieve needs financial planning. Regardless of how much money you are making , financial planning will help you achieve both greater wealth and financial security. Inadequate or improper financial planning can lead to financial disasters that no one wants. For example, an uninsured loss can wipe out all your accumulated wealth; insufficient savings for retirement can force a reduced lifestyle or even worse, the postponement of retirement and many other financial catastrophes that are too depressing to mention.

What is financial planning?

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.

Financial planning is also about making choices such as:

• Do I want to spend all my income today or do I save some for later?
• Should I clear all my debts today or should I increase my savings for retirement instead?
• Should I plan for my child's education or should I let him find his own scholarships or apply for a study loan himself?

An ideal financial plan does not focus on one aspect or product only, it involves taking all areas of planning into consideration when making financial decisions.