How Financial Planning Helps You Manage Your Money Strategically

Fiancial PlanningFinancial Planning is an integral element of personal financial management. It is a strategic approach in which a financial planner helps people deal with various financial issues in areas such as cash flow management, investment planning, retirement planning, risk management etc. It involves the incorporation of myriad of financial resources and financial tools to achieve financial goals.

All industries across the world have seen drastic changes since the last decade and better financial planning and management is required to handle the financial intricacies. Moreover, with recent economic slowdown and recession, people are realising the importance of financial advisers and planners, especially in Sydney, to manage their personal finance through proper assessment of current situation and comparison with the plan.

Important Aspects in Financial Planning: A financial planner should address all the areas of the client’s financial needs and successfully achieve the set goals. Some of the areas that must be addressed in the overall financial plan are:
? Risk Management
? Cash Flow Management
? Insurance Planning
? Education Planning
? Investment Planning
? Tax Planning
? Estate Planning
? Relationship Management

Steps Involved in Financial Planning: Financial planning involves strategic decision making. Discussed below are the steps that enable strategic financial planning:

Step 1: Goal-setting with the client- Primarily, the financial planner has to identify the client’s financial goals and life goals.

Step 2: Gathering information on the client’s cash inflows and outflows- Preparing a list of how the cash is coming and going would help the planner to better understand how well the money is utilised and how much has to be used for investing purpose.

Step 3: Identifying financial problems that can create barriers- After listing the goals and collecting information on cash inflows and outflows, the financial planner has to identify the pertaining or possible financial problems that can create barriers in achieving the financial goals. Some of these barriers may be recession, high inflation, inadequate increase or decrease in income etc.

Step 4: Making the plan- For each financial goal, a systematic investment plan has to be devised by choosing the correct investment instruments and planning the alternatives, wherever possible.

Step 5: Implementing the plan- A financial plan is only successful if it is put into action. This is done by utilising the resources allocated for each goal in the plan.

Step 6: Periodic review and revision of the plan: Many times the planned scenario does not match up with the actual situation. Because of this, it is important to review the steps to check for misalignment and changes in the client’s situation.

Importance of Financial Planning: In order to reap long term benefits, it is important to plan finances with the help of financial planners and advisers. Some of the reasons why financial planning is important are stated below:

? Increased cash flow: Financial Planning ensures proper flow of cash by undertaking measures such as tax planning, prudent spending and careful budgeting.
? Strong capital base: Through efficient financial planning, strong capital base can be established. It enables the person to think about investments and thus, improve their financial position.
? Income management: Financial planning facilitates management of income which helps in segregating it into tax payments and other monthly expenditures and savings.
? Fulfil financial goals: By planning the finances, an individual can fulfil his or her aspirations which may include enrolling for an educational program, going for a vacation or savings for retirement.
? Family security: From the point of view of family security, financial planning is crucial. Various policies available in the market serve the purpose of financially securing one’s family.
? Standard of living: A proper financial plan ensures that one’s standard of living is not affected even in difficult times. For instance, death of the bread winner in a family or recession may affect the SOL if the financial plan is not in place.
? Savings: Through planning, one can ensure financial security in the form of savings and investments.

Though financial planning is believed to be a time-consuming activity, it is worth all the effort.

Financial Advisor – How to Find the One You Like

Financial AdvisorYour financial life more or less controls every other aspect of your life since you need money to eat, drink, have a roof over your head, and to have clothes on your back. Sometimes, you need a little help with your financial life, which is why you may wish to employ the services of a financial advisor.

A financial advisor will help you make the right decisions regarding your present and future financial condition. You do, however, need to make sure you have the right person doing the advising or they can lead you in the wrong direction and cause you to lose everything.

It is a fact that most people will need the help of a financial expert at some point in their life. You will need their assistance with retirement plans, finances, investments, insurance, estate planning, or your income taxes.

When you use a financial advisor, they are able to guide you through all of the rules, regulations, and the complicated federal and state laws. It is through their recommendations that you are able to make your plans more solid. You know that you are on the right track when your advisor tells you so and advises you on how to keep everything going in the right direction.

Even a person who is not on the right track can benefit from what a financial advisor has to offer. As a matter of fact, these individuals can go from being “down and out” to landing on their feet and establishing a stable financial future.

Choosing the right financial advisor

The financial services industry is offering more and more services to individuals. Rather than just providing advice, the service range is much broader. This means the first thing you need to know when looking for advice is what service you want to take advantage of. Financial advisors come in different forms. They come as investment advisors, financial consultants, investment consultants, or another title suggesting the same. No matter their title, they all state that they offer the best financial services available.

It is up to you to find out whether or not the claims that they offer the best financial services are true or not. Here are the steps you need to take to find the best financial advisor for you:

Compile a list of advisors you want to check out. You can check your local telephone book or do a search online. You can also locate financial advisors through an Internet search.

Make an appointment with each company you are interested in. This hour of consultation may be free or it could cost you up to $150 or more. The time should be spent with you telling the financial advisor what you want. Be sure to be prepared by having your net worth, a statement of your income, and what your goals are. Preparation can keep you from having to pay out a large sum of money for the advisor’s time.

Confirm what the financial advisor’s fees are. Ask how they are paid, how much they charge, etc. Those such as tax advisors and estate planners may request to be paid by the hour, while others may be paid through commissions they earn when facilitating stock trades.

You should always request an “ADV form.” Each financial advisor that is legitimate and manages over $25 million in investment assets reports their methodology, education, compensation, and business background to the Securities and Exchange Commission. This form allows you to obtain that information. Those that manage less than $25 million in investment assets disclose the same information to the securities agency within their state.

If the financial advisor sells securities, they should have a Central Registration Depository, or CRD, on file with the state securities agency.

During your appointment look for any diplomas or other credentials on the advisor’s wall. If you do see such documentation, look at what the initials after their name say. You want to see ChFP for Chartered Financial Consultant, CFP for Certified Financial Planner, PFS for Personal Financial Specialist, or CPA for Certified Public Accountant.

Unfortunately, most states do not have a licensing requirement, so almost anyone can call themselves a financial planner. This is why you want to rely upon credentials.

Experience is also important because the longer, the better. You can ask for sample work, names of clients, and ask how long the financial advisor has been in the field and done business in the area.

If you have friends who have used a financial planner in the past or present, ask them about their experiences. Be sure to find out anything you can regarding how they charge, if they are trustworthy, if they have the proper credentials, etc. Word of mouth is very powerful. Keep in mind, however, that you need to make your own determination because your idea of a good financial advisor may not be the same as your friend of family member’s.

Using the above tips can help you to find the financial advisor that is right for you and your particular financial situation.

Here are just a few more tips to help you choose a financial advisor that is the right fit:

You may want to choose an advisor that does specialize in different areas if you want to experiment with different ways to make your money work for you. For instance, you need to be advised on how to save money, but you may also want to do some investing so that you can make your money grow. Having your services in one place can help you to save money rather than having different types of financial managers with their hands in your finances.

Once you have the right financial advisor in place, you can rest assured that you will have a much better financial future than you would have otherwise. You only live once, so you want to make sure you live it right and as comfortable as you can.

Get Peace of Mind and Financial Freedom with a Household Budget

get peaceWith the economic times hitting so many households so hard it is time to find out how you will be able to manage in these difficult times. A household budget must be implemented in order to determine where you are overspending and can cut costs. This can help you begin to practice cost analysis methods before you go out and spend money.

A cost analysis is a method of determining the overall cost of a family event. For example, you want to take your three children to the movies and you want a real cost of the show. The show is 50 miles away, the kids must eat, you have to buy tickets, etc. You may find the overall cost to go to the movies after gas, food and tickets, is around $100 or more. This is not cost effective for your budget. Determining the cost of a movie is not only the tickets to get into the show. This is where many people go wrong with their budget and they cannot figure out where their money went. Take snacks, carpool, eat first, or just rent a movie on pay-per-view and stay at home. A cost of $5 is much better than $100.

A household budget will consist of everything you owe and everything you count on. The priority items on your budget include living expenses you cannot go without which include basic necessities like a roof over your head, electricity, water, food costs etc. Below these items then place all of your monthly bills that you owe underneath.

You also have to include all the items that constitute your net worth, all the money received in your household, etc.

This is where you face reality. It is very painful for some people, especially if there is a risk to lose their jobs and they have a lot of debt.

The good news is that a household budget can give you the peace of mind you need and an open door to financial freedom. Knowing how to set it up in a way that instead of giving you pain gives you freedom and money in your bank account is the key to succeed in your way out of debt slavery.

A household budget is vital if you want to make it in the economy today. Many people dont know the first thing about a budget and financing. You dont need to be an expert, but you need to know how to set it up, what items to include, and the tricks to make the process as painless as possible. With the right tools and information, setting up a household budget becomes very easy.

Debt Relief and Financial Planning

debtThat nobody likes debt is a simple truth. However, our current economic model is driven by debt. From the billions that countries borrow from each other and common resources to the thousands that people spend each year on their credit cards, debt is built-in to our modern world.
But the problem with debt is that it is often easy to lose control of the situation and take on more debt than is physically possible to repay, considering other commitments you may have. In addition, unfortunate events often give rise to unwanted but necessary debt. From insurance deductibles and co-pays to unexpected expenses, an average person’s books are a delicate balance between income and expense. If that balance is upset for any reason, the downward spiral to uncontrollable debt starts to happen.
How Can I Recover from Huge Debt?
It is definitely an unpleasant experience dealing with unpaid debt; the problem impacts nearly every other aspect of your life from your mental well-being to your future employability. Since your credit rating is linked to every major financial transaction you will ever make, a dip in that is akin to being hit when you’re down. The double-effect of debt and poor credit can often send people into bouts of anxiety and affect family life as well.
Recovering from debt is all about evaluating, planning and then executing. The first step is to eliminate sources of further debt. If that means cutting all of your credit cards in half, by all means do that. If your gas-guzzler of a car is the source of your debt, get rid of it and take the bus instead. If your lifestyle habits are the source, make some drastic changes to control further debt. However, this is only a first step; the only thing that will help you at this point is negotiating a new payment plan with your creditors. A professional debt management company can help you do this, but you have to be up-front about any existing debt and all sources of income so they can help negotiate on your behalf and chart out a new payment plan for you.
Why Do I Need a Financial Planner?
A financial planner can deal with the debt part, but more important than that is your future financial health. Dealing with a fire is only a temporary solution – the real answer is in making things fire-proof to whatever extent possible. A company like Your Financial Life is dedicated to making this happen for you. Click here to find out more about their services, and reasons to use them. They will guide you through the maze of financial planning and draw out a new game plan for your ultimate success.

How Financial Advisors Can Help In Expatriate Investing

How Financial AdvisorsWhen a person works hard for the entire month to get his income at the end, he doesn’t want it to go in waste. He will try to look for the new ways to invest his income to make it grow with the help of the best financial advice given to him by experts. Investment is the best way to see your money grow and have a safe financial future ahead. There are different ways of investment to let your money grow like:

* Insurance: in insurance plan a person has to deposit a certain amount of money with the insurance company for a given period. After the amount you have deposited reaches maturity, you can take the money along with the interest hence a bigger amount will be given to you. There are different types of insurance plans like life insurance, education insurance and medical insurance, which can provide you funds if you die, have to pay for treatment or any other unfortunate incident, otherwise can receive the amount after the maturity.
* Mutual funds: mutual funds are the funds you deposit in the market along with a company, or by buying shares of that organization. They can provide you great returns only if the market is performing well and is in bull or having profits. If the market is going down like it is happening now with the economic crisis, you can lose your entire sum of money deposited. You can take help from the top financial advisors to find out about the safest mutual funds.
* Investing in real estate: this field of investment is not new but wasn’t much popular with the moderate income group like it is now. You can invest in a construction company and avail assured returns if the company is registered. Make sure to find out about the company more before investment.
* Expatriate investment: in expatriate investment a person invests money in some other country or in a foreign land. This surely can give you a large percentage of returns but also involves risks. You do not know about the company in which you are investing. People have faced lots of frauds in expatriate investing thus government of USA has declared it illegal. If still you want to go ahead with it then discuss with financial advisors about which company is good and how you make more money.

Visit mintfinancial.com for more information on these.