Glossary
Financial Planning
Financial planning is the process of setting goals, evaluating your current financial situation, and creating a long-term strategy to manage your money effectively. It includes budgeting, saving, investing, retirement planning, insurance, tax strategies, and estate planning.
Why is financial planning important?
It helps you stay in control of your finances, prepare for life’s uncertainties, reach major goals like retirement or buying a home, and build long-term security.
What’s included in a financial plan?
A comprehensive plan typically covers budgeting, debt management, investing, retirement savings, insurance coverage, tax planning, and estate planning.
Do I need a financial planner to create a plan?
Not necessarily. You can build a plan yourself, but a certified financial planner (CFP®) can offer professional guidance, especially for complex situations.
How often should I update my financial plan?
Review and update it at least once a year, or after major life events like marriage, a new job, having children, or retirement.
What’s the difference between financial planning and investment planning?
Financial planning is broader and includes every part of your financial life, while investment planning focuses specifically on how to grow your wealth through assets like stocks and bonds.
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