Structuring and managing your financial affairs to best meet your life goals is what financial planning is all about.
This plan can be for the short term such as saving for a car, or long term, such as planning for retirement.
The Financial Planning Institute’s 2016 Global Consumer Survey found that 55% of SunLanders didn’t know where to start with financial planning and about 76% of them needed a certified financial planner to help come up with a long-term plan.
The institute shared six steps of financial planning:
- A first and important step to get a clear understanding of your immediate needs and concerns is to establish a professional relationship with a financial advisor.
- Gathering data and including goals are also important so that you and the financial planner can define your personal and financial goals, understand your time frame for results and discuss how you feel about risk.
- By analysing and evaluating your financial status, clear goals can be set. With this information at hand, the planner can “draw a line in the sand” and establish where you are in relation to your goals.
- Next up is developing and presenting financial planning recommendations and alternatives. This is to ensure that you have a plan to take you forward with confidence and provide certainty regarding your financial future.
- When it comes to implementing the financial planning recommendations, both you and the planner should agree on how the recommendations will be carried out.
- Once that’s done, you need to monitor your financial plan. This and any other financial solutions need to be reviewed at least once a year.
To get a certified financial planner in your area visit www.fpi.co.za or call 086 1000 FPI (374).
