What Is Financial Planning? Types, Objectives, App, Analysis

Amazing Facts about Financial Planning

Finance is a crucial aspect of our livelihood in a world as complex this one. We all need to do financial planning at some point in time of our lives. 

However, all of us are required to chalk out a roadmap without which financial planning would be meaningless. 

Before one embarks upon financial planning, one needs to do a thorough analysis of the past, present, and future conditions.

What is financial planning?

Financial planning meaning, in a broad term, is to plan how you want to go about spend, invest, and utilizing your fund to achieve economic stability and at the same time achieve your short term and long term goals.

In India, due to errant financial planning, or should ‘lack of planning’, we all end up in dire stress or experience turbulent personal and family lives.

Financial planning hedges you from most uncertainties and debacles in life that can be controlled or prevented.

Why Financial Planning is required?

  • Expedite a habit in you for Savings
  • Instils confidence by financially positioning yourself better
  • Peace of Mind enabling you to enjoy life to the fullest
  • Stress-free confident & comfortable life
  • Achieve meaningful Goals leading to a successful social status

Financial Planning process 

There are a few guiding principles that need to be followed before arriving at financial planning.

First, is to analyze your current financial status. 

Second is dividing and distributing your current income under different heads.

Third would be to know all unavoidable tax implications of your income or investments.

Fourth, ensure your and your family’s health and life.

Fifth, plan your investments

Sixth is to clear your debts at the earliest.

And, last but not least, take the assistance of a qualified financial planner.

The above sounds encouraging though not easy to accomplish. It requires a lot of will power, mental and physical stability, education, meticulous thinking, and zeal to achieve. 

Steps in financial planning

  • Set realistic time-bound achievable goals
  • List down all your expenditures, and even impending near future ones
  • Prepare for an emergency pool of funds to fall back on in extreme conditions.
  • Very important to attack toxic debt because it will eat away all your potential future savings.
  • Careful selection of Investment at an early stage of your life to really grow your savings compounding
  • Look for stability than risking your money out of greed

Importance of Financial planning

By doing a thorough yet meticulous financial planning and analysis, what you will get is a roadmap and strategies that will help you achieve your life’s important financial goals.

If you are able to successfully accomplish personal financial planning, it will help reduce financial risk, money related uncertainties of future needs and helps you further maintain good and stable financial health.

Objectives of Financial Planning for Beginners

Let’s quickly run through the golden rules on how to take baby steps in financial planning finances for a young workforce.

  • Learn to manage your money well and efficiently
  • Regulate your expenditures wisely and thoughtfully
  • Maintain and track your personal balance and income-expenditure sheet
  • Judiciously deal and manage surplus cash through savings and investments 
  • Plan and create a personal investment portfolio
  • Do not ignore or postpone retirement financial planning
  • Manage and liquidate your debts as soon as possible
  • Ensure that your risks are covered
  • Plan your estate (your own house)
  • Plan your taxes 
types of Financial Planning

Types of Financial planning

There are primarily three types of financial plans that include:

A short-term financial plan is determined for a time span of 1 year. This plan takes into consideration your current income and other financial resources at your disposal and your needs.

A medium-term financial plan is determined to keep a five-year time span in mind. This takes into consideration, your career path, future income increment and growth prospect and your needs.

Long-term financial plan determined for a time span of five years and more. These are generally big money/ investment goals. This requires systematic planning, savings, expenditure control, tax savings and meticulously following of the financial planning strategy and roadmap.

Broadly, in technical terms, financial planning revolves around how well you do the following:

  • Cash flow management
  • Investment management
  • Debt Management
  • Tax Management

Cashflow Management

Managing cash flow, defined as inflow and outflow of funds, is crucial for your financial management. In simple terms, it is to keep a tab on your income and expenses.

You need to estimate your present and future expenditure, accordingly, you need to create a roadmap to keep your expenditures under control and achieve your financial goals faster.

Cash flow management also refers to creating a pool of emergency funds for unforeseen financial needs like health-related expenditures, or any kind of unplanned expenditure.

For beginners, it will help them derive the amount of disposable income after meeting all the necessary expenditure.

Investment funds Planning and management

This is driven by your short term and long term goals and roadmap to achieve those in a time-bound fashion. 

There is no denying that one needs to accumulate enough corpus of funds to meet high-value goals, such as buying a house, educational and marriage expenditure of children, etc.

It is essential that you should work towards building sizeable funds at different stages of your life by investing in various investment instruments early in your life.

Insurance investment planning

Insurance is your safety net for you and your family. In case of any unfortunate event, it is the insurance amount that will be a savior for your family after you.

Insurance such as Life insurance, health insurance, home & vehicle insurance is some of the inevitable insurance that you should add to your life as a part of your financial planning as you cruise along with life.

Insurance also acts as a hedge during market fluctuations and inflation and keeps you future-ready.

Tax Planning and management

This is a liability that you have to factor in in your expenditure to arrive at your disposable income. Tax exemption and tax liability minimization is of utmost importance to maximize your real income.

You need to take the help of invest planners or tax consultants to invest in tax saving instruments, through various government and private investment schemes. 

This way you also contribute to the development of the economy and infrastructure for the future and next-generation which include your children to make their lives better.

Real estate investment planning

The most sought-after goal of most people worldwide is to create a permanent shelter for them and their families. This is one of the most important goals of people who do not have a house of their own. 

Buying a house is a big investment and requires meticulous planning and a road map to achieve it. This is also a great tax savings investment under government tax exemption.

Real estate can also act as an investment and future income stream, by investing in by commercial estates such as shops, offices, second houses. All of these are capable of generating a stable future income stream for you and your family.

Children’s future planning

Children are your responsibility to give them a good life and security. You are the one who needs to give them a stable career, in terms of their education, higher studies, and marriage.

Times are difficult and by no means, it is going to get easier in times to come. As a parent, you need to prepare your children against all odds and contribute as much as possible to ease out their lives when they grow up to offer them a kick start.

Retirement planning management

This is for you and to secure your and your spouse’s future so that you do get dependent on your children as much as possible and maintain your dignity as a parent.

The last thing that all parents want is to live old age at the mercy of their children. All want to live their head held high till the last breath. So a secure old age inevitably calls for a secure retirement planning.

A secure retirement planning in advance, early in your life is the key to a peaceful retirement without worrying about finances related to day to day and health-related expenditures. 

Taking health insurance early in your life goes a long way to reduce health expenditures later in your life.

Financial Planning & Education for Beginners

You cannot agree more that in every field to succeed education is of prime importance. Finance and investments are no exception. While hearsay knowledge can help you to some extent, it will fall flat on its face in the long run.

If you want to manage your finance well then a formal education or training might help rather than building a castle in air based on hearsay. 

If you are serious about getting educated or interested in taking up a formal education either to be a better financial planner or to build a career as a financial planner then you can join the international college of financial planning under Mumbai University. You can visit their website for further information.

I am not an advocate of the institution; however, I thought it might help some, especially the beginners of the stock market. Formal training in the stock market would certainly help.

As a matter of fact, stock market financial planning and analysis involves a lot of chart, data, and statistics. To decipher those, formal training on data analysis is imperative to my view. 

A better analyst would read the data, chart well to derive the correct values this arriving at the correct decision. A financially uneducated person will learn by trial and error.

A properly trained person will involve a far lesser margin of error that a less trained person. The rest is your decision. 

If you think the way I am thinking, then I may explore options to join any other recognized institute of financial planning, not necessarily the International College of Financial Planning. Expert advice always helps a long way.

Top 14 Financial planning app

  • Money lover
  • Toshl
  • mTrakr
  • Moneycontrol
  • Tax calculator
  • Splitwise
  • Digilocker
  • Pocket Expense
  • Money-Wise
  • Finansisto
  • Andromoney
  • CWMoney
  • My Funds Lite
  • Expense Manager

Financial planning pdf research papers and study materials are available from financial researchers across the world to give insight on the path-breaking breakthrough and latest developments in financial planning and analysis pdf.

Financial Planning Calculators

The financial planning calculator helps you to quantify your financial planning and analysis and advance it from the planning stage to real tangible numbers on paper.

There are ready to use financial planning calculator to help you in quantifying your various financial needs to strengthen and solidify your financial planning.

Some of the leading and popular Financial Planning Calculators are:

These calculators help your financial planning easy and uncluttered.

The need for Financial Planning Calculator

Future Goal Value

It is not easy sitting today to gauge what would be the future value of your goal because it is not possible to predict inflation, the real value of money, government policies at that time, etc.

Financial Planning using zerodha Demat Account


You live for the happiness of members of your family and taking the unconditional responsibility of each member. You work hard, try your maximum, fulfill your responsibilities also known as goals in Financial Planning. 

Your goals could be accumulating funds for your child’s education and/or marriage. To achieve or this, you will have to calculate the amount you need to save. 

The future value of the goal will differ from the current estimate because inflation will affect the estimated value of the corpus fund that you would need. 

Hence you need various calculators and apps to determine the actual forecasted and the estimated value and start working towards achieving it.

FAQs About Financial Planning

Financial planning is often considered as a career path chosen by young Turks who want to become financial professionals. 

There are some pertinent questions that are asked in life to gauge the acumen of the user aspiring to become a financial professional.

These questions are common from a professional financial that you may visit to decide a road map and quantum of financial planning need for you. 

You may also try to answer these questions to yourself to get a clear idea about your own financial planning need. 

Some of these questions to get a perspective of financial planning includes:

Q1. What is financial planning?

Financial planning meaning, in a broad term, is to plan how you want to go about spend, invest, and utilizing your fund to achieve economic stability and at the same time achieve your short term and long term goals. Financial planning helps you estimate the capital required to fund your expenditures and achieve financial goals.

Q2. What is the importance of financial planning?

By doing a thorough yet meticulous financial planning and analysis, you will get a roadmap and strategies that will help you achieve your life’s important financial goals. If you are able to successfully accomplish personal financial planning, it will help reduce financial risk, money related uncertainties of future needs and helps you further maintain good and stable financial health.

Q3. What are the various types of financial planning?

Various types of financial planning include:

  • Cash flow management
  • Debt Management
  • Tax Management
  • Investment management

Q4. What Is in A Financial Planning?

Financial Planning is a never-ending process. It helps you to take prudent and pragmatic decisions about your money to maintain financial stability throughout your life.

Q5. What Is Financial Planning And Analysis?

The stage of financial planning takes outputs from financial planning to assess and analyze how robust and result oriented your financial planning has been.

Q6. Why Is It Important To Have A Financial Plan?

The importance of financial planning is to define your long and short term financial goals of a working individual and a crucial way forward in road mapping your financial future and to stay on track and aligned with their goals.

Q7. What Is Strategic Financial Planning?

This is used to determine how an individual will afford to achieve his/her goals based on a strategy and objectives of financial planning. 

Q8. What Do You Mean By Personal Financial Planning?

Personal financial planning means budgeting, saving, and spending financial resources over a period of time after due consideration of risks and future events as it takes place in its due course in life.

Q9. What Is the Purpose of Having A Financial Plan?

The purpose is to align your financial resources with your financial goals and objectives.

Q10. What Are the Objectives of Financial Planning?

The objective is to look ahead in your future life’s need. It is to look forward to determining your financial requirements, determine access to financial resources over a period of time, and resources are optimally utilized to achieve your goals.

Q11. What Are the Major Components of Financial Planning?

The major components of Financial Planning can be broadly classified under the following heads.

  • Current Resources
  • Investment Options
  • Financial Goals
Sharing Is Caring:

Stockquantum was founded by Dharmendra Mukati in 2018. I am a Trader and Investor in the last 10 years. I am writing here about stock broker review, broker comparison, IPO investment, Crypto currencies, technical analysis, fundamental analysis, sub brokership, mutual fund, personal finance, and our experiences.