Key Components of Financial Planning

You probably have a wide range of long- and short-term financial goals, from building an education fund to planning for retirement. This is where a financial plan can help.

We are going to discuss the key components of financial planning to help you set up your goals and save for them.

What is Financial Planning?

A personal financial plan is an overview of your financial goals. Since everyone has a different financial situation, every plan will look different. However, almost all plans include life and financial goals, an analysis of the current finances, and an outline of how you will accomplish the goals you’ve set.

What Are Some of the Main Components of Financial Planning?

Here are the key components of financial planning.

1. Cash flow analysis

One of the most critical aspects of financial planning is understanding your cash flow and the connection between your current assets and debts. If you spend more than you make, it will be impossible to reach the goals you’ve set.

2. Risk management

Another essential part of financial planning is risk management. How you deal with life situations, for example, what are you going to do if you become medically unable to perform your work or physically disabled to deal with work obligations should also be included in your plan.

3. Superannuation planning

Superannuation will likely be or become one of the largest investments you will own so it is crucial that you are maximising the opportunities within this structure.   This includes analyzing the fees, the investments and asset allocation and taking advantage of any taxation or contributions strategies.

4. Retirement planning

Retirement planning helps you understand when you want to retire. The plan should include your lifestyle and income objectives after your retirement.

It is also important to understand how Government Entitlements can fit in to your retirement strategy and if there are any ways of boosting these further.

5. Investment management

There are many different vehicles or strategies to use to invest any surplus income or funds you may have and each have different taxation implications or risk and return characteristics which is why it is important to receive advice.

6. Taxation planning

To protect your investment returns, tax management is essential. There are numerous tax-reduction methods and strategies for generating wealth transfer options and tax-free income, which can be achieved thanks to tax planning.

Talk to Precept Financial Planners Today

If you are seriously considering your financial future, let us help you plan it. We have been helping people of all ages create their financial plans for decades. Our experience will help you outline your financial map to living out comfortably for the rest of your life.

Contact us today to schedule your appointment.

Any advice in the article is general in nature and does not take into account your personal circumstances, objectives and needs. Therefore, before making a decision, you should consider the appropriateness of the advice with regard to those matters.

Please see our Financial Services Guide for more information.

Precept Financial Services Pty Ltd (ACN 140 538 147) as trustee for SF Unit Trust trading as Precept Financial Services is an authorised representative of Charter Financial Planning, Australian Financial Services Licensee and Australian Credit Licensee No. 234665

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