What is financial planning?

Financial planning is the process of building a comprehensive financial strategy to

complete long-term financial goals. Financial planning can help you reduce tax
liabilities, plan a wedding, recover from debt, have children, pay for higher education or
manage risk, retirement and estates. Your financial plan includes steps you plan to take
to achieve financial goals. A good financial plan often tracks your progress toward goal
completion quarterly or semiannually.

When financial planning, you may use a portfolio that outlines your cash flow and
assets. Understanding your current financial situation allows you to predict your
financial destination. It also can help you define your financial goals and develop a
strategy for meeting them based on your preferences. Financial planning can help you
because it allows you to set measurable targets you can reach, and it guides you on
how to use your money when you make important financial decisions.

Related: 6 Types of Financial Careers (Plus Job Profiles and Salary)