Your goals will depend by your personal situation and what you need for the future. For example, you may need to plan for retirement, buy a second home or send your babies to private school. The list is only limited by your imagination.
Financial planning is about building an objective plan for your financial future. You ought to follow these principles to be positive that every aspect of your financial life is covered, and therefore build a solid foundation to meet your goals.
What about financial advice?
This is all based on a common sense approach. Someone can do it, you need to be methodical and objective.
Regrettably, most financial advisers do not offer comprehensive FinLit financial planning. Most of them are glorified sales people. This is proved by the fact that they usually sell products than designs. If your financial adviser starts by speaking products he is thinking about himself than your future!
Of work, there is a place for products, but only at the finish of a comprehensive analysis of the reasons why you need that solution. What is more your financial plan might reveal that you do not need further products!
What ought to be in my plan?
Here are the main areas which need to be covered. There may be other areas, depending by yourself circumstances.
You need to think of your plan as a whole because your financial decisions are inter-linked. For example, in the event you have an pricey mortgage this may impact on your ability to save for the future. You will need to get together information on every aspect of your financial situation.
Without an finish in mind, it will be difficult to evaluate your progress. Therefore you ought to think about carefully about what you need your future to look like. These goals ought to be measurable.
This is essential to building your plan. In the event you spend less than you earn, you have a chance to affect your financial future. In the event you spend over you earn you will have limited options and could spiral in to debt. Understanding tax is a large part of this.