What is financial planning?
Financial planning is the process
of ensuring your life goals through the proper management of your finances.
Financial planning helps you to anticipate all financial needs that will emerge
in the future. The objective of financial planning is to provide sufficient
amounts of money in the right hands and at the right moment in the future in
order to ensure that individual goals are achieved.
Why is financial planning important?
Financial planning ensures the
direction and significance of your financial decisions. It allows you to understand
how each financial decision affects other financial areas. For example, the
conclusion of a particular savings product can help you fund your child's
higher education or provide satisfactory financial resources for a decent
retirement. With additional financial resources, it is much easier to adapt to
potential life changes, or feel safer when you know that you are following your
Who is a personal financial consultant?
A personal financial consultant
is someone who understands the process of financial planning and helps you
determine how to achieve your goals in life. The main function of a personal
financial consultant is to help people determine the needs of the financial
plan, their current priorities, and to provide products that are best suited to
ensure identified needs. In most cases, a personal financial consultant has a
very wide knowledge of the tools and products of different providers, of
course, the main goal is to provide the best possible product for the individual
needs of the client. He/she certainly sees a great picture of the current
financial situation and proposes the most appropriate financial plans for each
Can I make a personal finance plan myself?
Some personal finance packages,
magazines and self-help books can help you with your own financial planning.
However, you may decide to seek the assistance of a personal financial
consultant - expert if:
- you need the expertise that you do not have in
certain areas of your finances. For example, a personal financial consultant
can help you to assess the level of risk in the investment portfolio and review
the allocation of funds;
- you do not have enough time to edit your own
financial plan yourself;
- you know that you need to improve your current
financial position, but you do not know where to start;
- you believe that a personal financial consultant
- expert could improve your plan and strategy for the current management of
- an immediate or unexpected life event occurs,
such as inheritance or major illness;
- you want to get an expert opinion on a financial
plan that you have developed yourself.
What should I pay attention to a personal financial consultant?
A personal financial consultant
works for you and for your own good. His loyalty belongs to the client, not to
the products he/she sells. We feel that independence is truly the best way to
give objective advice to clients. As independent personal financial consultants,
we do not have restrictions or requirements for the use of any particular investment
product or solution. This allows us to create customized financial plans
designed to ensure the security and growth of financial resources for our
How can I plan for the future if I do not have enough resources today?
Create a budget. Find out how
much you actually spend each month. There are fixed costs, such as rent, loan
repayments, etc., which are present every month and we can not change anything
in this regard. Variable items, such as food, clothing and entertainment, are
often those we do not think of. The solution is to create a balance sheet and
control the inflows and outflows of your assets.
How much do we have to save?
It is difficult to enforce the
saving rule because it varies by age and level of revenue. Ten percent is a
good start. If you find that % is too high for you, do not let it discourage
you. Start by saving yourself a small amount each month, which you increase
with each month.
What if I do not achieve my goals?
Financial planning is a common
approach to managing your finances in order to achieve your life goals. You can
not change your status overnight; this is a lifelong process. Remember that
events that are beyond your control, such as inflation, changes in the stock
market, interest rates, will affect your financial planning results. The
solution is annual reviews and updates according to the current situation both
in the market and in your life.
Why should I disclose so many personal information?
Think about visiting a doctor?
Without complete and completely accurate information, your doctor can not
prescribe the best treatment. The same applies to financial planning. To get
the best solution for your "financial health" you need to disclose
all the details.
What data should I disclose?
Typical are information on
investments, number of dependents, income and expenditure data, saving and
financial planning requirements, etc. The more accurate the information is, the
better the quality of the advice.
What should a personal finance plan contain?
The personal finance plan should
include an overview of your net worth, goals, investment portfolio, cash flow,
investments, retirement, tax planning, insurance services, that is, the overall
financial plan for achieving your goals.
Why is the assessment of the need for insurance services necessary?
Assessing your needs for
insurance services is part of your personal financial planning. Insurance takes
care of your unpredictable needs, and as these needs can arise at any time,
insurance is extremely important. Investments take care of your foreseeable
needs and do their best to follow your unpredictable needs. Insurance has
changed considerably over the last few years, and there are also many new
products that are very flexible.
What about taxes?
It is important that personal
finance plans are tax-efficient. Your personal finance plan will help you
reduce the tax liability and increase returns after taxing your investments.
Some personal financial consultants help their clients optimize their tax
What happens when I make a personal finance plan?
Even the best plan is unusable if
it does not start. Your personal financial consultant will fully assist you in
implementing the plan, if and when you will.
How often should my personal finance plan be updated?
It is good to review the plan
when there is a change in life, such as marriage, birth, death or divorce. Any
change in the financial position is also necessary. Most people have an annual
update that evaluates how the plan is implemented. The review also deals with
changing objectives and circumstances.
Do I have to personally meet a personal financial consultant?
It depends on what you need. We
can send you the complete questionnaire. Based on your answers we will be able
to prepare a customized personal finance plan specifically for you. If you need
more detailed information with a personal financial consultant, please call us
on +386 70 664 433, or write at firstname.lastname@example.org.