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Financial Planning is the process of evaluating and managing the utilization of financial resources optimally for achieving an organization’s goals and objectives. Financial planning helps insulate businesses from myopic policies and practices and aids in mapping out their financial future.

Financial planning is one of the sought-after financial courses for working professionals owing to the rapidly growing need for trustworthy and knowledgeable personnel, and this article is aimed at shedding more light on the topic.

  • What is Financial Planning?
  • How Does Your Business Benefit From Financial Planning Process?
  • What do you Mean by Financial Planning Process?
  • What are the Different Types of Financial Planning?
  • What are the 5 Steps in the Financial Planning Process?
  • What Kind of Process is Financial Planning?
  • Why Financial Planning Process is Important?
  • What are the 7 Key Components of Financial Planning?
  • What is the First Step to Financial Planning?
  • What are the Most Important Steps in Financial Planning?

What is Financial Planning?

Financial Planning is the process of estimating the capital required and determining it’s competition. It is the process of framing financial policies in relation to procurement, investment and administration of funds of an enterprise.

Read Also: What is ESG Investing?

Whether it is an organization or a person, financial planning is critical to ensure that all expenses are taken care of, and the future is secure. For a company, this is of utmost importance as many people depend on it for their livelihoods. It cannot afford to find itself unable to continue operations. Having a clear idea about how a firm will spend money is crucial for reaching its goals.

How Does Your Business Benefit From Financial Planning Process?

Let us see how this financial planning process benefits organizations.

1. Have Clear Business Goals

The main advantage of financial planning is that it allows a company to have clear business goals. When there is a good understanding of what money is available and how much can be expected, it is easy to set goals for different periods.

Companies can plan for three, six, or nine months. It can also set goals for a year and beyond that period. Though everything may not happen as planned, it is good to have an idea and prepare for risks. With sound financial planning, organizations can achieve most of these goals.

2. Manage Cash Flow

Various steps in financial planning help to manage cash flow efficiently. It will allow companies to know how much revenue they will earn in a particular period. There will also be a concrete plan of how they will use this cash.

Budgeting is part of the process, and it will help make sure that you can pay regular expenses that are part of a company’s operations. It is also possible to meet unexpected costs when there is good cash management. It helps to continue development works as planned.

3. Better Allocation

Financial planning allows companies to allocate funds in a better manner. Money is required for various activities that a firm must perform as part of its routine. When there is good planning based on information from multiple departments, it is easy to provide money for various purposes in a more rational manner. Every business unit of the company will also find it an excellent exercise to prioritize their projects and complete them successfully.

4. Cost Reduction

Cost reduction is a part of the process of financial management. Every company is looking at ways to reduce costs. Analyzing past spending and their returns is an excellent method of finding a possibility for reducing costs. This must be part of financial planning if an organization must benefit from this exercise. Lowering costs is vital for growth and development. Regular review of spending is an excellent way to find avenues for cost reduction.

5. Risk Management

Every company must prepare itself for unexpected events. Though everything cannot be predicted accurately, modern methods like analytics are helping to forecast various incidents correctly. Using this information, organizations must look at preparing themselves for future threats. Financial planning is an excellent opportunity to look into these and make provisions to overcome such risks. As all risks cannot be avoided, it is sensible to prepare for losses resulting from such events.

6. Crisis Management

Crisis management is different from risk management. Crises are not expected, and companies suddenly face a situation they must manage but are unprepared for. When these circumstances last a long time, it is essential to keep changing financial plans frequently as the pandemic situation. Those having a robust plan in place will find it easier to manage instead of those who must start from scratch.

7. Raise Funds Easily

The process of financial planning helps considerably when a company needs funds. It can be a new company looking for investors or a company that needs more funds for expansion. All of them will need to approach lenders with a concrete plan about what they will do with the money. Those lending money will more trust a firm with a financial plan because they know that such a company will spend wisely. They can be sure of getting good returns on their investment.

8. Transparency

Making a financial plan is a way to ensure transparency in a company. It is a new thought that employees must also know how a company is spending money. Many CEOs have started disclosing their salaries openly. A financial plan is an excellent way to tell employees how firms are spending money. This plan will give assurance to workers that their firm is going on the right path. They will not worry about their future.

It is pretty clear that financial planning has many advantages, and all companies must perform this exercise to ensure better use of money. It is worth knowing the components this plan must include.

What do you Mean by Financial Planning Process?

Financial planning is the practice of putting together a plan for your future, specifically around how you will manage your finances and prepare for all of the potential costs and issues that may arise. The process involves evaluating your current financial situation, identifying your goals and then developing and implementing relevant recommendations.

Financial planning is holistic and broad, and it can encompass a variety of services, which we detail below. Rather than focusing on a single aspect of your finances, it views clients as real people with a variety of goals and responsibilities. It then addresses a number of financial realities to figure out how to best enable people to make the most of their lives.

Financial planning is not the same as asset management. Asset management generally refers to managing investments for a client. This includes choosing the stocks, bonds, mutual funds and other investments in which a client should invest their money.

However, the same professionals who offer asset management services can also offer financial planning. A financial planner is effectively one type of financial advisor. Advisors can earn certifications focused on financial planning, the most notable of which is “certified financial planner (CFP).”

What are the Different Types of Financial Planning?

A financial planner may offer a variety of services to you. These services will often be considered in concert with one another. This helps the planner put together an overall plan that considers all aspects of your current situation and future aspirations.

Here are eight common services that are generally offered as part of financial planning:

  • Tax planning: Financial planners often help clients address certain tax issues. They can also figure out how to maximize your tax refunds and minimize your tax liability. Certain advisors may also be able to actually help you with preparing your taxes and filing your annual taxes.
  • Estate planning: Estate planning seeks to make things a bit easier for your loved ones after you die. Preparing a will may be part of a financial planner’s services. Estate planning also helps prepare for any estate tax you may be subject to.
  • Retirement planning: You presumably want to stop working some day. Retirement planning services help you prepare for that day. They ensure that you’ve saved enough money to live the lifestyle you want in retirement.
  • Philanthropic planning: It’s always nice to give something to people who need it or help a cause close to your heart. Financial planning can help you ensure you’re doing it efficiently and getting all the tax benefits you’re eligible for.
  • Education funding planning: If you have children or other dependents who wish to pursue a college degree, you may want to help them to pay for it. Financial planning can help make sure you are able to do so.
  • Investment planning: Though financial planning doesn’t include the actual management of your assets, it can still help with your investment portfolio by mapping out how much you should be investing and in which types of investments.
  • Insurance planning: A financial planner can help you evaluate your insurance needs. Some financial planners are also licensed insurance agents and can sell you insurance themselves. However, they’ll likely earn a commission, which would create a conflict of interest.
  • Budgeting: This is perhaps the cornerstone of financial planning. A planner can make sure you are spending the right amount given your income and can also make sure that you aren’t going into debt.

The exact services offered by a financial planner will vary based on the individual. Make sure the financial planner you choose offers the services you need.

What are the 5 Steps in the Financial Planning Process?

A personal financial plan is a blueprint you use to organize your money to ensure economic stability throughout life. A solid plan can help you make smart decisions with your money as your financial foothold evolves.

And the best part about the personal financial planning process is that it doesn’t have to be complicated. With or without a financial planner, you can whip up your plan in five easy steps.

Step 1: Assess your financial foothold

What your finances look like now shapes your personal financial planning process moving forward. To assess your financial foothold, take stock of your income, expenses and debt.

List your assets: the value of your property and investments (if any) and the balances of your checking and savings accounts. Then, list your debts: credit card balances, mortgages and other loans.

Next, compare your income against expenses to see where your money is going and how much you’re left with at the end of the month after you pay your bills.

Knowing whether your assets can cover your debt and whether you have wiggle room at the end of the month to invest and save can help you develop financial goals.   

Step 2: Define your financial goals

You set financial goals to achieve a lifestyle, and to achieve that lifestyle, your goals must consider three things:

  1. How much money you need to pay your bills.
  2. How much money you need to pay off your debts.
  3. How much money you’ll need to save and invest to achieve the lifestyle you want.

Step 3: Research financial strategies

First, get your high-interest debts out of the way quickly before you start to save and invest. You can do so by consolidating your debt or using the debt avalanche or snowball method.

Second, consider opening a savings account if you haven’t already. These accounts encourage monthly contributions to build a fund for emergencies or other substantial expenses you might need to pay down the road.

Third, consider opening an investment account if you haven’t already. These help you generate wealth over time through investment returns — money earned on your investment through price appreciation. Investing has inherent risks, which you’ll need to consider.

Step 4: Put your financial plan into action

Now that you’ve formulated a plan, take time to review it. Talk to a financial planner to see whether you’ve overlooked something and to make sure your numbers add up.

If you can’t afford one, talk to someone you trust, such as a close friend or family member. Once you’re confident you’ve created a solid personal financial plan, put it in motion. 

Step 5: Monitor and evolve your financial plan

Your individual financial plan is a “living” document — it’s going to evolve as your financial footing changes. Review your personal financial plan every year or so. Start at the first step to get a snapshot of how your finances are doing, and make any necessary changes to the rest of your plan. 

What Kind of Process is Financial Planning?

The correct investment strategy and sound financial advice will determine how you live today and in the future.  There are six stages to developing a financial plan and carrying out personal money management. From beginning to end, a certified financial planner professional guides you through the financial planning process – keeping in view your current financial situation and economic background.

1. Identify your Financial Situation

The first stage of the financial planning process constitutes an assessment on what is happening in your life right now and how you can change your financial situation. The key areas to reflect are:

Household budgeting –This is an important area as after calculating the monthly costs spent at home, you’d be able to figure out how much you are left with to save or invest.

Family commitments and Living Expenses – Are you single or married? Do you have children? What are their living and lifestyle expenses?

Tax Standing and Strategies – How do you manage taxes? Are you living or working abroad?

Current investments or saving reserves – How much savings or debts you have right now?

Other Financial obligations – These may involve some miscellaneous costs you might be planning ahead for future such as:

•    A wedding or property purchase
•    Emergency funds to cover for household catastrophes
•    Family Funds reserve in case something happens with your job or you
•    Is your retirement just around the corner?

This step serves as a foundation for developing your plan and gives you a good reference point to achieve your short as well as long term financial goals.

2. Determine Financial Goals

Experts say when you have identified your goals; you’re most likely to achieve them. Highlighting the financial goals serves as an important aspect of financial planning. Subjected to what phase in life you have reached, these goals could be:

•    Get married and initiate a family
•    Purchase or pay off a property
•    Ensure your children get a good education
•    Make your reserves and investments tax proficient
•    Get retirement with enough income on hands to enjoy life ahead

The sole purpose of this step is to differentiate your needs from your wants.  Apart from these, the goals or objectives may range from spending your entire income into developing a long lasting investment program for future financial security. However, you must select which goals you need to pursue.

3. Identify Alternatives for Investment

After a thorough understanding of your financial needs has been taken and all the appropriate financial goals have been cemented down, the next thing is the investment alternatives or specific recommendations from your financial planner.

By taking a good look at your short, medium and long term goals, an integrated investment strategy would be developed based on your set requirements. Furthermore, the objectives would be looked upon again and it will be analyzed how far you are down the road to achieving your short and long term financial goals.

Taking in account your timeframe, cash flow, risk tolerance, current insurance coverage, tax strategies and investment goals, a range of ideas and financial planning alternatives would be presented in order to determine which one suits you the best. This will help you produce more actual and satisfying decisions.

4. Evaluate Alternatives

The proposed recommendations are then further assessed. This is your chance to discuss the alternatives face-to-face and take necessary actions bearing in mind your current situation, financial standings and personal interests. If you have any concerns regarding your financial planner’s recommendations, those can be altered and revised. Alternatives can be closed down based on the decisions you make. For instance:

The idea to carry on your education attests you cannot do a full time job. Decision making thus stands as an ongoing process that works side by side with your personal and financial situation so lost opportunities as a result of your decision making should always be kept in mind while analyzing the alternatives.

  • Risk Evaluation

While evaluating the options you might end up having uncertain ideas. For instance, choosing your career over studies involves risk. How can you ensure that it’s rewarding in your future?
Other financial decisions involve a comparatively low degree of risk such as saving your money in a savings account or purchasing some object of great value with it. The option of losing that object is low in such scenarios.

Thus while making financial decisions; finding out risks and evaluating them is tricky. You need to collect data based on your experience and the experiences of others as well. Decision-making process will require you to frequently update your knowledge politically, economically and socially so you can make informed decisions.

5. Put Together a Financial Plan and Implement

Once you are content with the recommendations and feel good to proceed, the implementation of the plan would be carried out. This step of financial planning process can be considered as an action plan where you will pick ways to achieve your short, immediate or long term goals. Often taken as the toughest step for some people, but makes a huge difference in the long run!

The key thing to consider here is to carry it out as early as you can. The longer it’s left unattended, the longer it will take you to grow your wealth – ultimately a great shortfall in your savings when you retire.  

6. Review, Re-evaluate and Monitor The Plan

Financial planning is an on-going and dynamic process and it’s unlikely that your financial condition will remain same throughout your life. You need to assess your financial decisions periodically as changed personal, economic and social factors will require you to alter your decisions to fit into your new situation.

As you progress through the different phases of your life, you financial needs will be reflected and the financial process will serve as a tool to let you adjust to these changes. Monitoring your plans will help you prioritize your decisions and make necessary adjustments that will bring your financial needs and goals in line with your current life situation.

Why Financial Planning Process is Important?

Below we have discussed the importance of financial planning and why we need planning. It will give you clear thoughts ideas,

1. Income Management

One factor financial planning is crucial is that it can truly help you manage your money in the best way possible. It can also assist you in developing a strategy that will assist you in calculating the number of resources needed for monthly spending.

It can genuinely help you figure out how much money you’ll need for taxes and how much money you’ll be able to save from the specified amount. Anyone can profit from this, whether they are a company or an individual.

2. Improved Cash Flow

Income growth leads to an increase in overall retained earnings. Financial planning is essential for the day-to-day operations of your professional and private life, where you must meet a variety of commitments as they arise. You can quickly find activities or obligations that require more attention by carefully analyzing your spending habits and budgeting.

This type of expenditure prioritization can greatly assist you in keeping track of your working capital, reducing overhead costs, and ultimately increasing your overall capital.

3. For Better Investment

A smart financial plan considers your specific situation, risk tolerance, and long-term goals. It then assists you in making the best financial decisions based on your needs and objectives. Financial planning aids in the creation and planning of financial resources for the future.

Canara HSBC offers several saving plans for all ages and occupations. You can choose from Savings Plans to Term Insurance plans that provide a heap of benefits to the buyer and family depending on the plan you have chosen.

4. Enhanced ROI on Portfolio

Financial decisions, risk assessments, cash management, liability management, and goal planning are vital parts of financial planning. Financial planning allows you to create an integrative investment program that takes into account your goals, appetite for risk, and available liquidity, allowing you to increase the return on your portfolio.

5. Inflation Secured

Inflation has been dubbed the “worst killer of purchasing power.” Over the previous few decades, the value of money has plummeted dramatically. In the foreseeable, it is only projected to worsen.

As a result, it is critical to organize your finances for a brighter and more secure future. With careful financial preparation, you’ll be better prepared to deal with growing inflation in the coming years as your business gets older.

6. Guarded Retirement Plan

While attaining your family’s objectives is a common goal for a comfortable post-retirement existence. If you want to retire early, you should start investing as soon as possible because compounding works best when money is invested for a longer period of time.

When bills remain but income dries up, proper financial planning aids you in building an adequate corpus for retirement. It’s usually a good idea to start investing early to achieve your life’s objectives.

What are the 7 Key Components of Financial Planning?

According to Schwab’s 2021 Modern Wealth Survey, those with a financial plan are more likely than those without one to pay their bills on time and save each month. So, what does a good financial plan look like?

While there are many ways to go about developing a plan—do it yourself, use a robo-advisor, work with a financial planner, or a combination thereof—Schwab has identified the eight critical components every plan should include, regardless of the method used to create it.

1. Financial goals

You can’t make a plan until you know what you want to accomplish with your money—so whether you’re creating it yourself or working with a professional, your plan should start with a list of your goals, both big and small. It can help to organize them by how soon you’ll need the money:

  • Short-term goals are those you hope to achieve in the next five years—such as paying off debt or buying a new car.
  • Medium-term goals are those you hope to achieve in the next five to 10 years—such as the down payment on a home or starting your own business.
  • Long-term goals are those that are 10 or more years away—including college and, of course, retirement.

For each goal, specify a dollar figure and a target date. “The more specific your goals, the easier it is to measure your progress toward them,” says Rob Williams, vice president of financial planning at the Schwab Center for Financial Research.

A host of online tools can help you run the numbers, weigh competing priorities, and determine the best course of action for you. And if you have multiple goals to work toward, a robo-advisor, or automated investing platform, can help you weigh the importance of each goal, ranking them by needs, wants, and wishes.

  • Any time is a good time to establish a financial plan.

Ideally, you start investing for financial goals early in life, but any time is a good time to check in on your current financial situation and assess how you’re doing—Are you still on track? Do you have other goals you hadn’t previously considered? Having a financial plan helps you assess where you are today and where you want to go next.

2. Net worth statement

Every plan needs a baseline, so next you should determine your net worth. Make a list of all your assets (bank and investment accounts, real estate, valuable personal property) and another one of all your debts (credit cards, mortgages, student loans). Your assets minus your liabilities equals your net worth.

“Don’t be discouraged if your liabilities outweigh your assets,” Rob says. “That’s not uncommon when you’re just starting out—especially if you have a mortgage and student loans.”

3. Budget and cash flow planning

Your budget is really where the rubber meets the road, planning-wise. It can help you determine where your money is going and where you can cut back in order to meet your goals. 

A budget calculator can help ensure you don’t overlook irregular but important expenses, such as car repairs, out-of-pocket health care costs, and real estate taxes. As you’re compiling your list, separate your expenses into two buckets: must-have items such as groceries and rent, and nice-to-haves such as eating out and gym memberships.

When considering how your goals fit into your budget, you may want to pressure-test it using “what if” scenarios: What if you want or need to retire earlier? What if you downsized your mortgage? Some robo-advisors offer tools that allow you to adjust certain assumptions to see how they could affect your savings strategy.  

4. Debt management plan

Debt is sometimes treated like a four-letter word, but not all debt is bad debt. A mortgage, for example, can help build equity—and boost your credit score in the bargain. High-interest consumer debt like credit cards, on the other hand, weighs heavily on your credit score. Plus, every dollar you pay in finance charges and interest is one you can’t put toward other goals.

If you have high-interest debt, make sure you create a plan that can help you pay it off as quickly as possible. If you’re not sure where to start, a financial advisor can help you prioritize, then determine how much of your budget should go toward your debts each month.

5. Retirement plan

An old rule of thumb says you’ll need approximately 80% of your present income in retirement. However, this assumes that retiring will free you from any work-related expenses and taxes, that you’ve paid off your mortgage, and that your children will be financially independent. 

It’s also important to keep in mind that Medicare doesn’t cover everything, and health care expenses that Medicare doesn’t cover—such as long-term care—can add up quickly. You also might spend more on other things in retirement, like travel, dining out, gifts, or financial support to a relative or friend.

Plugging in different scenarios into a retirement savings calculator can help you figure out what you may need in retirement. 

Don’t count on the 80% rule 

If you’re saving 20–30% of your pre-retirement income, then the 80% income-replacement rule is a good place to start. Otherwise, it’s safer to aim at covering 100% of your pre-retirement income, less whatever you’re saving for retirement. As with any general rule, there are plenty of exceptions. So be sure to sit down and fine-tune your retirement budget as the time draws near. This should be your top priority since you can borrow for most other goals but not for retirement.

6. Emergency funds

When something unexpected happens—you lose your job, for example, or get hit with an unexpected medical bill—an emergency fund can help you avoid tapping your long-term savings to make ends meet.

It’s generally a good idea to save enough to cover at least three months’—but ideally six months’—worth of essential living expenses (e.g., groceries, housing, transportation, and utilities). Save this money in a highly liquid checking or savings account so you can access it in a hurry should the need arise.

7. Insurance coverage

Insurance is an important part of protecting your financial downside—but neither should you overpay for coverage you don’t need. In general:

  • Health insurance: Without it, even routine care can cost a pretty penny, while a serious injury or hospital stay could set you back tens of thousands of dollars. As you get older, you may want to consider long-term care insurance, as well.
  • Disability insurance: This coverage protects you and your family in the event you’re unable to work. Employer-provided disability insurance typically replaces about 60% of your salary.
  • Auto and homeowners’/renters’ insurance: If you own a car or home—or rent and can’t afford to replace possessions out of pocket—make sure you’re adequately protected.
  • Life insurance: This is generally a good idea for those with dependents. Work with an insurance agent to understand what type of—and how much—coverage makes the most sense for you.

What is the First Step to Financial Planning?

Many people know they need a personal financial plan, but they don’t know where to start. Creating a financial plan on your own can seem overwhelming, but like any big project, breaking it down into smaller parts makes it easier to tackle.

The process of creating a personal financial plan can be broken down into a series of steps. Let’s start with the first step of the financial planning process.

Step 1: Take an inventory of your finances

What is the first step in financial planning? It’s a fact-finding mission as you take an inventory of your finances.

While that can feel intimidating, there are ways of organizing your financial inventory that will make the next steps in financial planning easier, the experts say. To get started, take out some paper or open a document and list out your:

  • Major assets, such as an estimate of the equity in your home, car, checking accounts, savings accounts, retirement accounts, and investment accounts
  • Recurring income from your job and any side hustles you do as ways to make money on the side
  • Debts, such as your mortgage, auto loans, personal loans, student loans, credit card debt, and medical debt
  • Recurring expenses, such as your utilities, rent, phone bill, subscription services, and any other recurring costs

Finding this information can take some digging, Bera says, but it will make your calculations easier in the following steps. You’ll likely need to log in to your various bank accounts, check your latest pay stubs, and review emails and paperwork as you work through each category.

However, you decide to gather the information, being detail-oriented at the beginning can pay dividends over time.

“You don’t have to become a spreadsheet nerd,” Muscadin says. “But if you’re trying to get a handle on these things, spend more time upfront.”

As you conduct your financial inventory, Bola Sokunbi, who is an author and the founder and CEO of Clever Girl Finance, recommends documenting where you found each piece of information alongside the amounts. Don’t include sensitive information like usernames or passwords, but you can include bank names or URLs to accounts. That way, Sokunbi says, you can more easily reference and update your financial plan in the future.

Once your financial inventory is complete, Bera says you’ll likely see some things pop out right away that you can “simplify, streamline and automate.”

These housekeeping tasks—such as rolling over old 401(k)s into an IRA, automating payments, or taking care of small, lingering debts—will help you organize your finances. Bera recommends doing what you can before moving on because it will help you focus on the big picture as you progress through the next steps in financial planning.

What are the Most Important Steps in Financial Planning?

Following the financial planning, process steps help you create a financial plan that fits your future. Whether you want to have enough to retire or save up to buy your first home, here are 6 important steps in the personal financial planning process.

1. Meeting with Your Financial Planner

Meeting with a financial planner could help you get a better understanding of your financial situation and what you need to do to meet your goals. Choosing the right financial planner can be essential if you’re going to work with one. Remember, not all financial advisors are qualified financial planners, but financial planners are a type of financial advisor.

When you meet with your financial planner, make sure you provide any information that may be relevant to your financial situation. Information you can share with your financial planner includes your current income, your current debt, any investments you’ve made, your monthly budget, and your most recent tax return. The more information you can give your financial planner, the better they can tailor your financial plan to your needs. 

2. Financial Evaluation

Now that you’ve met with your financial planner and discussed your financial situation, it’s time to evaluate your finances to get a better idea of where you’re at and what you need to do moving forward. This is when you’ll look at things like the amount of debt you’re in and how long it would realistically take to pay that debt off. Your financial planner will likely do a deep dive into your financial circumstances for the most thorough evaluation possible.

Keep in mind that each individual has a different financial situation, and the specifics of your evaluation and financial plan may change based on your situation.

3. Setting Goals & Planning

Your financial goals are one of the cornerstones of your financial plan. Once you have a better idea of your current situation, you can work on setting goals and creating a plan that is designed to help you work toward financial wellness. There are no set rules when it comes to creating financial goals; your goals don’t have to be the same as anyone else’s.

The financial planning process can include just about any financial goal you can imagine. Perhaps you’ve always wanted to own a vacation home, or maybe you want to save enough to pay for your child’s college expenses. Take some time to sit down with your financial planner and set realistic financial goals that you can work toward.

4. Implementing the Plan

While setting goals is a key part of the financial planning process, implementing your plan and working to meet those goals may be the most important step. Implementing your financial plan serves two important purposes:

  1. Your financial plan can be used to begin working toward a better financial future.
  2. Implementing your financial plan gives you an opportunity to see what works and what doesn’t.

It’s important to keep in mind that you might not see the results you want to see right away. Improving your financial situation takes time, especially if you’ve set long-term goals. Financial wellness is a long-term game, so don’t get discouraged if things aren’t happening as quickly as you’d like. 

Many people find that implementing a financial plan and sticking can turn their financial situation around, even if it takes a while.

5. Reviewing Progress & Adjusting

Ideally, your financial plan would be something you can follow to a T with little-to-no change. However, that’s rarely the case because life throws changes at you. As such, you may want to keep an eye on your progress after you’ve implemented your financial plan.

Read Also: What are Cross Border Payments?

Once you’ve set clear goals for yourself, you can review your progress and your financial plan to see whether you’re on track to reach those goals. If you’re not moving in the right direction, that may be the time to talk to your financial planner about making adjustments.

It can be frustrating when parts of your financial plan don’t work out, but it’s important to remember that you’re playing a long-term game. It may take a while to figure out the best course of action to reach your goals, but fine tuning your plan and being open to adjustments as needed is a natural part of that process. That’s why your financial planner is there to help guide you.

6. Ongoing Collaborative Relationship

Just because you’ve created a solid financial plan doesn’t mean you’re done working with your financial planner. Financial wellness takes time and effort, so you typically can’t expect to reach your goals right away–at least the big-picture ones. An ongoing collaborative relationship between you and your financial provider is a major part of helping you stay the course.

In addition to maintaining a collaborative relationship with your financial planner, you may also consider prioritizing financial literacy and other financial skills in your day-to-day life. Learning how to create a budget and stick to it, build your credit, and save your money are all skills that could play a role in your financial stability.

Remember, financial wellness doesn’t come overnight, especially if you’re in a precarious situation. The more effort you put in, the more you could potentially benefit from the process.


Personal finance experts agree that for your financial plan to be effective, you need to carve out time to review it. That’s because as life changes, whether you are a business or an individual, your goals will change, too, Sokunbi says.

“Life really sneaks up on people, especially in their 30s,” Bera adds. “All of a sudden, things are more complicated—you’ve got a house, a kid and you’ve changed jobs.”

Bera notes that monthly check-ins can work for some people, but not everyone will see significant progress on a month-to-month basis. If that’s the case for you, schedule a meeting with yourself once a quarter to keep your personal financial plan on track.

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