What Is Financial Planning?

Financial planning is the process of meeting your life goals through the proper management of your finances.

Your life goals could include buying a home, saving for your children's education, managing debt or planning for retirement.

Financial planners use a six-step process that helps you take a 'big picture' look at where you are and where you want to be financially. Using this process they help you work out what you need to do now and in the future to reach your goals.

The six steps of the financial planning process are:

1. Gathering your financial data - such as details on your income, debt level, commitments, etc.

2. Identifying your goals

3. Identifying any financial issues - or deficiencies between where you are now financially and where you want to be.

4. Preparing your financial plan - which will identify recommended investments and will address your attitude to risk

5. Implementing your financial plan

6. Reviewing and revising your plan - to ensure it stays up-to-date and relevant to the economic climate and your changing lifestyle