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Stages in Planning Process

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Submitted By jilalaisonga83
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Financial planning Process
• Step 1: Determine Your Current Financial Situation • In this first step of the financial planning process, you will determine your current financial situation with regard to income, savings, living expenses, and debts. Preparing a list of current asset and debt balances and amounts spent for various items gives you a foundation for financial planning activities.
• Step 2: Develop Financial Goals • You should periodically analyze your financial values and goals. This involves identifying how you feel about money and why you feel that way. The purpose of this analysis is to differentiate your needs from your wants. • Specific financial goals are vital to financial planning. Others can suggest financial goals for you; however, you must decide which goals to pursue. Your financial goals can range from spending all of your current income to developing an extensive savings and investment program for your future financial security.
• Step 3: Identify Alternative Courses of Action • Developing alternatives is crucial for making good decisions. Although many factors will influence the available alternatives, possible courses of action usually fall into these categories: • Continue the same course of action. • Expand the current situation. • Change the current situation. • Take a new course of action. • Not all of these categories will apply to every decision situation; however, they do represent possible courses of action. • Creativity in decision making is vital to effective choices. Considering all of the possible alternatives will help you make more effective and satisfying decisions.
• Step 4: Evaluate Alternatives • You need to evaluate possible courses of action, taking into consideration your life situation, personal values, and current economic conditions. • Consequences

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