Financial Planning
The process of setting financial goals and creating a strategy to achieve them over time.
What is Financial Planning?
Financial planning is the comprehensive process of evaluating one's current financial situation, defining goals (retirement, home purchase, education, estate), and developing a coordinated strategy to achieve them. It encompasses budgeting, tax planning, investment management, insurance coverage, retirement planning, and estate planning. A Certified Financial Planner (CFP) is a professional credential indicating expertise in these areas. Financial plans are living documents — they should be reviewed and updated as life circumstances, tax laws, and market conditions change.
Example
A 35-year-old couple working with a CFP sets goals: retire at 60 with $3M, pay for two college educations, eliminate debt in 5 years. The plan maps exact savings rates, asset allocation, tax optimization strategies, and insurance needs to hit each milestone.