The Financial Planning Process

MBA Financial StrategistsLatest ArticlesFinancial PlanningThe Financial Planning Process

The Financial Planning Process

A financial plan is your monetary ‘blueprint’ as you go through life. It provides direction to your financial goals, and helps you take control of your income, expenses and investments.

The financial planning process is a step-by-step plan that helps you identify your current financial situation – and your financial goals and objectives into the future.

MBA Financial Strategists pen and paper

Steps in financial planning

There are six steps in the financial planning process:

  1. Understanding your current financial situation
  2. Setting your financial goals and objectives
  3. Identifying any road blocks to achieving your goals
  4. Determining what strategies will help you achieve your financial goals
  5. Implementing your strategy
  6. Monitoring your strategy.

Following the steps in financial planning will help you achieve the goals and objectives you have set in your long term financial plan.

Understanding your financial situation

Understanding your financial situation is the first step – and arguably the most important – in the financial planning process.

To do this, simply take stock of all your assets, including cash, investments, real estate, cars, jewellery and retirement income – and then all your debts and liabilities, including mortgage, rent, car payments, credit cards, utility bills, medical costs, household expenses, childcare, school fees and transport.

Financial goals and objectives

Now is the exciting part – identifying your financial goals! Common financial goals are:

  • saving for a house deposit
  • paying off your mortgage
  • starting a new business
  • developing an investment portfolio
  • saving for your child’s education
  • planning for your retirement.

Identify financial roadblocks

It is important to determine if the financial goals you have set are realistic, based on your current financial situation. Sometimes, it helps to have a financial adviser on board to help you determine this. We can help with this. Book your appointment today.

By identifying financial roadblocks – such as spending more than you earn – you can get back on track to achieving your financial goals.

Determine your strategy

Now we’re approaching the ‘engine room’ stage of your financial plan, where your financial adviser will present you with a plan that is tailored to suit your personal and financial situation – along with your financial goals and objectives.

The plan is likely to have many elements to address all of your goals.

Implement your strategy

Your financial adviser will outline the recommended course of action to implement your strategy.

This might involve:

  • implementing a new investment strategy
  • making adjustments to your expenditure
  • changing mortgage providers
  • estate planning
  • adding life insurance or income protection insurance.

Your adviser will step you through the plan, and support you every step of the way.

Monitor your strategy

In the same way you monitor your own health, or that of your car, you will need to regularly monitor your financial plan.

This means regularly reviewing the actions recommended in the plan, and reviewing your financial goals annually to consider evolving family or business circumstances; or a change in income or assets.

Contact us

MBA Financial Strategists have been helping people create achievable, long-term financial plans since 1985.

To learn more about the benefits of creating a long-term financial plan, book an appointment with one of our financial advisers today.  Alternatively, give the practice a call on |PHONE|to make an appointment with a financial planner of your choice.