Personal Financial Plan

Introduction

Financial planning is the process of meeting your life goals through the proper management of your finances. Life goals can include buying a home, saving for your child's education or planning for retirement. The process involves gathering relevant financial information, setting life goals, examining your 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. Financial planning provides direction and meaning to your financial decisions. It allows you to understand how each financial decision you make affects other areas of your finances. For example, buying a big-screen television using a credit card may enhance the value of your belongings, but it may cost you more over the long run due to the finance charges. By viewing each financial decision as part of a whole, you can consider its short-term and long-term effects on your life goals. You can also adapt more easily to military life changes and feel more secure that your goals are on track.

Jalen and Mila Smith Personal Financial Planning

The Six Step Process of Personal Financial Planning

Personal financial planning focuses on the individual. In order to best serve an individual's needs, the professional financial planning practitioner employs The Total Financial Planning Process comprising these six distinct steps:

Step 1

Clarify Jalen and Mila Smith Present Situation

The financial planner clarifies the Jalen and Mila Smith present situation by collecting and assessing all relevant financial data such as lists of assets and liabilities, tax returns, records of securities transactions, insurance policies, will, pension plans, etc.

Step 2

Identify Goals and Objectives

The financial planner helps one identify both financial and personal goals and objectives as well as clarify Jalen and Mila Smith financial and personal values and attitudes. These may include providing for children's education, supporting elderly parents or relieving immediate financial pressures which would help maintain Jalen and Mila Smith current lifestyle and provide for retirement. These considerations are important in determining the best financial planning strategy for one.

Step 3

Identify Financial Problems

The financial planner identifies financial problems that create barriers to achieving financial independence.Problem areas can include too little or too much insurance coverage, or a high tax burden. Jalen and Mila Smith cash flow may be inadequate, or the current investments may not be winning the battle with changing economic times. These possible problem areas must be identified before solutions can be found.

Step 4

Recommendations

The financial planner provides written recommendations and alternative solutions. The length of the recommendations will vary with the complexity of Jalen and Mila Smith situation, but they should always be structured to meet the Jalen and Mila Smith needs without undue emphasis on purchasing certain investment products.

Step 5

Implement Strategies

A financial plan is only helpful if the recommendations are put into action. Implementing the right strategy will help one reach the desired goals and objectives. The financial planner should assist one in either actually executing the recommendations, or in coordinating their execution with other knowledgeable professionals.

Step 6

Monitor and Review

The financial planner provides periodic review ...