You may have come across the term "financial planning" recently and wondered what it means. You may have decided to start your own financial plan but you're not sure how. Or you may feel it is time you went to a financial planner for some professional advice.

Financial planning is the process of meeting your life's goals through the proper management of your finances. Life goals can include buying a home, saving for your children's education and planning for retirement.

When developing a financial plan for you, professional financial planners use a six-step process, they can help you work out where you are now, what you may need in the future and what you must do to reach your goals.

The process involves gathering relevant financial information, setting life goals, examining you current financial status and coming up with a strategy or plan for how you can meet your goals given your current situation and future plans.

The Benefits of Financial Planning

Financial planning provides direction and meaning to your financial decisions. It allows you to understand how each decision you make affects other areas of your finances. For example, buying a particular investment product might help pay off your mortgage faster or it might delay your retirement significantly. By viewing each financial decision as part of a whole, you can consider its short and long-term effects on your life goals. You can also adapt more easily to life changes and feel more secure that you are on track to reach your goals.

Selecting Your Adviser

To help you choose your Financial Planner the Australian Securities & Investment Commission has put together a step-by-step guide to help you choose the right Adviser. Click on this link to visit the ASIC web page about selecting your adviser.

Reproduced with the kind permission of the Financial Planning Association of Australia Limited.

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