Financial Planning in simple terms is the process of making advance preparations for financial needs, that may or will arise in the future.
According to the institute of Financial Planning UK, “Financial Planning is an ongoing process to help you make sensible decisions about money that can help you achieve your goals in life; it’s not just about buying products like a pension or an ISA.”
It enables an individual to plan for his several financial needs; which can be broadly classified in the following two categories;
1. The need to provide money for predictable events
2. The need to provide money for unpredictable events
A predictable event requires the accumulation of money for a specific event occurring at an expected period of time.
For Eg: Planning for Children’s college fees.
An unpredictable event is the one, which occur at anytime, or it may not occur at all.
For Eg: Death of a parent, before children have become financially independent.
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