Personal Financial Planning Process
From Financial Literacy Wiki
Personal financial planning process is similar to planning a long trip to a destination. The first step is always to identify your starting point or know where you are currently. Next step is to know where you intend to go, your destination. After having these two pieces of information, you can then plan a route from your starting point to the destination. The choice of the route you want to take depends on you. Once you have decided your route, you can then start your car engine and off you go to your destination. Suppose midway you found that there was nothing interesting to see, you may decide to switch to another route to reach your destination. Or you are forced to change the route, because of weather conditions, or worse, you found out that you are lost and time is running out which may result in you changing your destination.
Planning for your personal financial affairs is similar to planning for the trip as mentioned. For personal financial planning process, it involves four steps and they are:
- Assessing Current Financial Resources
- Defining Financial Goals
- Developing Systemic Financial Plans
- Implementation of Financial Plans
