Financial planning

What is financial planning?

Financial planning is the process of making optimal decisions for implementation. And also analyze and predict the same to predict possible outcomes. It is mainly created to achieve financial goals by optimizing costs and saving more in the wrong way. Financial planning can also include control by analyzing and implementing an ideal financial plan.

Financial goals

Goals that a person sets to achieve financial milestones or plans. In other words, they are financial goals that a person wishes to achieve within a certain time frame. For example, it could be creating a fund for their children’s education, travel, emergency, health care, etc

Types of financial goals

• Short-term goals

Short-term goals are goals that a person must achieve in less than three years. They can be about creating a budget for student tuition or buying a car. The focus here should be on safety and liquidity. Banks and credit union accounts can be good investment options because the money invested won’t lose much value in six months or a year. In addition, they have easy liquidity.

• Long-term goals

Long-term goals are goals that require more than ten years to achieve. The most common example of a long-term goal is a retirement plan. A person sets their retirement plans for 10 15 or 20 years ahead of time. The amount collected should help people live their lives after retirement without going out and looking for work. Therefore it is important to make money

Features of financial goals

How to set financial goals?

1. Goals should be specific
2. Goals should be measurable
3. Goals should be attainable
4. Goals should realistic
5. Goals should be time-bound

Advantages and disadvantages of financial goals

•  It Helps in Determining Financial Goals and Achieving Them.

• Keep Your Future Safe for Emergencies

• You Stay Prepared For Upcoming Challenges and easily solve them.

• Positive impact on mental health
• You feel relaxed and solve any problems on time

• It Covers the Beginning To the End of Your Life

Disadvantages of Financial Planning

• It is a time-consuming process

• The future is uncertain and can double your investment or halve its value.

• Creating a sustainable financial goal with the right approach is not an easy task.

• You’ve created a financial goal and the method you’re going to use it for. Then you need to devote some time to timely monitoring.

Common Risks in Financial Goals

Having some flexibility, and knowing where that flexibility lies, will help reduce the stress and impact if something goes wrong.

• Investment risk.
• Inflation rate risk.
• Lifetime risk.
• Health hazard.
• Unexpected risk of death or disability.
• Property risk.

References

https://en.wikipedia.org/wiki/Finance

https://www.google.com/search?q=financial+goals&