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1)
Identify your Financial Situation.
The first stage
of the financial planning
process constitutes assessment on what is happening in your life right now and how
you can change your financial situation. The key areas to reflect are:
Household budgeting
–This is an important area as after calculating the monthly
costs spent at home, you’ll be able to figure out how much you are left with to save
or invest.
Family commitments and Living Expenses
– Are you single or married? Do you
have children? What are their living and lifestyle expenses?
Tax Standing and Strategies
– How do you manage taxes?
Are you living or
working abroad?
Current investments or saving reserves
– How many savings or debts you have
right now?
Other Financial obligations
– These may involve some
miscellaneous costs you
might be planning for future such as:
• A wedding or property purchase
• Emergency funds to cover
for household catastrophes
• Family Funds reserve in case something happens with your job or you
• Is your retirement just around the corner?
This step serves as a foundation for developing your
plan and gives you a good
reference point to achieve your short as well as long term financial goals.
