What Are The 6 Steps In The Financial Planning Process?

1. (1) determining your current financial situation.
2. (2) developing financial goals.
3. (3) identifying alternative courses of action.
4. (4) evaluating alternatives.
5. (5) creating and implementing a financial action plan, and.
6. (6) reevaluating and revising the plan.

What are the steps in financial planning process?

1. 1) Identify your Financial Situation. ...
2. 2) Determine Financial Goals. ...
3. 3) Identify Alternatives for Investment. ...
4. 4) Evaluate Alternatives. ...
5. 5) Put Together a Financial Plan and Implement. ...
6. 6) Review, Re-evaluate and Monitor The Plan.

What are the 6 key areas of personal financial planning?

• Cash reserve levels.
• Cash reserve strategies.
• Debt management.
• Cash flow management.
• Net worth.
• Discretionary income.
• Expected large inflow/outflow.
• Lines of credit.

What are the 7 steps of financial planning?

• The 7 Steps of Financial Planning.
• Step 1: Understanding the Circumstances.
• Step 2: Identifying and Selecting Goals.
• Step 3: Analyzing the Client’s Situation.
• Step 4: Develop the Plan.
• Step 5: Presenting the Recommendations.
• Step 6: Implementing the Recommendation(s)
• Step 6: Monitor the Plan.

What are the six steps in the financial planning process quizlet?

1. step 1: determine your current financial situation. ...
2. step 2: develop your financial goals. ...
3. step 3: Identify Alternative Courses of Action. ...
4. step 4: evaluate your alternatives. ...
5. step 5: create and use your financial plan of action. ...
6. step 6: review and revise plan.

What is the first step of the five step financial planning process?

Review Of Current Financial Situation

The first step in the financial planning process involves taking a detailed look into a person’s current financial situation . This means examining a person’s savings, income, debts and current living expenses.

What are the three rules of financial planning?

• Rule #1: Keep Debt Under Control.
• Rule #2: Avoid Being House-Poor.
• Rule #3: Aim to Save at Least 10% of Income.
• Rule #4: Don’t Overlook Emergency Savings.
• Rule #5: Be Realistic About Retirement.
• The Bottom Line.

How do you calculate financial plan?

1. Start with a sales forecast. Set up a spreadsheet projecting your sales over the course of three years. ...
2. Create an expenses budget. ...
3. Develop a cash-flow statement. ...
4. Income projections. ...
5. Deal with assets and liabilities. ...
6. Breakeven analysis.

How do you prepare a financial plan?

1. Set financial goals. It’s always good to have a clear idea of why you’re saving your hard-earned money. ...
2. Create a budget. ...
3. Plan for taxes. ...
4. Build an emergency fund. ...
5. Manage debt. ...
6. Protect with insurance. ...
7. Plan for retirement. ...
8. Invest beyond your 401(k).

What is the most important step in financial planning process?

Monitoring Your Financial Progress . Regular communication and follow-up are important steps in the financial planning process. In fact, creating the plan is really just the first step. You’ll have ongoing contact with your planner to find out whether you are on track to meet your financial goals.

What are the main components of personal financial planning?

• Financial goals. ...
• Net worth statement. ...
• Budget and cash flow planning. ...
• Debt management plan. ...
• Retirement plan. ...
• Emergency funds. ...
• Insurance coverage. ...
• Estate plan.

What are the key areas of personal financial planning?

• #Number 1: Saving.
• #Number 2: Investing.
• #Number 3: Financial protection.
• #Number 4: Tax Saving.
• #Number 5: Retirement planning:

What are the four areas of financial planning?

A sound financial plan is based around four major elements, known as the four pillars: cash flow, risk, debt, and asset management .

What is the first step in developing a financial plan?

1. Step 1 – Defining and agreeing your financial objectives and goals. ...
2. Step 2 – Gathering your financial and personal information. ...
3. Step 3 – Analysing your financial and personal information. ...
4. Step 4 – Development and presentation of the financial plan.

What are the 7 steps to have a workable and meaningful financial plan?

• Goal Setting. Money is a difficult topic. ...
• Cash Flow Analysis. In order to fund your goals, you’ll need to direct your money towards them. ...
• Goal Analysis. ...
• Investment Analysis. ...
• Risk Analysis/Management. ...
• Estate Review. ...
• Rinse & Repeat.

What are the types of financial planning?

• 1.1 Cash Flow Planning.
• 1.2 Insurance Planning.
• 1.3 Retirement Planning.
• 1.4 Investment Planning.
• 1.5 Tax Planning.
• 1.6 Real Estate Planning.