What is financial planning?

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To many people, financial planning sounds like something for the very rich. The wealthiest people take their piles of money to someone who tells them where to invest it so they can make even more money. The rest of us just focus on saving what we can while paying off debt and hoping we don’t lose our jobs before we’re financially stable.

In fact, financial planning is about having long-term and short-term financial goals and developing a plan to achieve those goals.

  • learn how to make the most of your money – whether that’s putting a little extra into savings one month or paying off a bit of debt more quickly.
  • make smart financial decisions so your money is working for you as efficiently as possible while reducing your monetary stress.
  • become financially stable more quickly, so you can survive if any major expenditures come along.

In short, financial planning is something everyone can benefit from.

Your goals

Financial planning involves figuring out your current financial situation – your assets, debts, what you spend your money on and what you want your financial situation to be. What do you want to spend your money on in the next year? Where do you want to be financially in five years? Do you have any major expenditures on the horizon? When do you want to retire? How much do you need to save?

“As Chartered Accountants we help you assess and manage your financial situation and discuss a broad plan for your budgets, goals, business and finances; however when it comes to investment it is essential you speak with a qualified financial planner,” Porters CA Director Simon Terry said.

Porters CA work closely with Knight Financial Advisors. This ensures you receive excellent and appropriate advice from one of Australia’s leading advisors, who we know and trust.

Open conversations between you, Porters CA and Knight Financial Advisers can identify how to achieve your best outcome across business, accounting, tax, investment, super and personal goals. It is a simple and rewarding process of discussion and guidance to help you take control and get ahead.

One of the first steps in financial planning is setting out your immediate, medium, and long-term goals. This can be done with a discussion assessing your income, living, lifestyle and business expenses. This may vary depending on your age (people nearing retirement have different goals than those just starting their career), your financial circumstances and your life circumstances (are you married? Do you have children?).

We often identify value adding opportunities that surprise clients with their simplicity,” Simon said.

Your plan

Your financial plan involves determining how you will get from where you are now to where you want to be. You’ll determine how much money will go into savings and how much will pay off debt. You’ll set a budget for how much you can realistically spend a month and whether you can invest.

Understanding your financial situation and where your money goes can help you make decisions about spending and saving. It also helps you be realistic about your goals.

People who don’t have a plan tend to spend more than they need to and wind up with nothing in savings or investments and possibly have a large amount of debt. Those who have a plan tend to stick to it and find it easier to save money, pay off their debt and build sustainable long term wealth.

We often identify value adding opportunities that surprise clients with their simplicity,” Simon said.

Your super

You have a super fund.  You may have many super funds.  You may have insurance.

Do you know how these work?  Is your insurance appropriate?  Will it cover you or your family in case of sickness, trauma or death?  Do you know your investment performance?

Your super should form part of your plans.  A financial planner helps manage your super to make sure it is delivering benefit to you rather than to your super fund manager.

Your financial planner

A financial planner helps you set goals and determine how much you need to save to be financially secure into retirement. They can help you understand your finances better, so you can boost your savings and possibly reduce your tax load.

They’ll even check on you to keep you accountable for your finances, and if things have changed for you they can help you adapt.

If you’re looking at investing, a financial planner can help you determine how you can make the most of your investments and how the various investment types fit into your financial plan.

Final thoughts

A financial plan aims to set goals, save money, order finances and decrease your financial stress. It is the difference between barely getting by and being financially secure.

It doesn’t matter how much money you have or earn, a financial planner can help you make the best decisions with your money to enhance your financial security. Integrate financial planning advice with your accounting and tax and your future will take care of itself.

To meet with our accountants or preferred financial planners call us on (08)64360900.

We book consultations in Perth and Albany for accounting and financial planning advice.

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