Financial planning is the formulation of a plan of action for optimal financial outcomes at a pre-defined time period, this could be short- (next 12 months) mid- (2-5 years) or long-term (10 years and beyond through until retirement).

Sound financial planning requires that all potential situations are considered and that contingencies are also determined.

As part of the process a person’s or organization’s goals, risks, values, restrictions and current situation must all be considered.

Financial planning also looks at what financial requirements are needs, how they can be met, how expenditure can be minimized and investments optimized .

Obviously a person’s financial situation will vary depending on the stage of life that they are in (parent, retirement and so on) thus a financial plan is never static but should be reviewed in order to make sure it still fulfils its initial objectives and is relevant to the individual.