Financial Planning nz

Financial Planning nz

Financial Planning in New Zealand.

Financial Planning is defined as a tool that allows one to define financial goals, assess ones current finance situation and allows one to plan what one needs to do to achieve those goals. 

This planning is a dynamic process that requires regular monitoring and re-evaluation to avoid problems. It consists of five steps:

Financial Assessment

Under this process, one’s personal financial situation can be assessed by compiling accounts of balance sheet and income statement. For an individual, a personal balance sheet would include value of personal assets (car, clothes, property, and bank account) along with personal liabilities (such as credit card debt, mortgage, and bank loan). And a personal Income Statement with income and expenses

Setting Financial Goals

This goal setting is done with an intention to come across certain financial requirements. Say for example, buying a house in three years and paying the mortgage in monthly terms of not more than 25% from gross income. Or retiring at the age of 65 with capital worth a million dollars. 

Creating a Finical Plan

This is simply detailing on how to achieve one’s goal. Meaning cutting down on unwanted expenses, investing in a stock market or growing one’s job income. 

Financial Plan Execution

Executing of one’s financial plans necessitates discipline and perseverance. Therefore many individual acquire assistance from lawyers, accountants, financial planners and investment advisors.

Monitoring and assessment

This last step is very important as with time one’s financial plan need to be monitored for likely adjustments and assessments. Financial planning is important because in today’s world, young adults as well as adults goal is to pay off credit card debts, student loan debt, or paying for medical expenses thus financial planning will help keep a track on managing funds wisely

Financial planning is important because in today’s world, young adults as well as adults goal is to pay off credit card debts, student loan debt, or paying for medical expenses thus financial planning will help keep a track on managing funds wisely