What is financial planning?

• A financial plan helps create certainty around your goals and how to achieve them.
• Financial planning can be on many levels.
• Make time to think about your financial future. It' a great first step.

There are many sources and levels of financial planning, either self-directed or from a licensed financial adviser who can help you put strategies in place to help achieve your financial goals.

Our ambitions and motivations are closely connected to our financial situation. Knowing what you want to achieve in life means having goals and creating a blueprint to help make this possible and keep tabs on how you are tracking. Importantly, a financial plan should ensure that you have strategies in place to help you minimise risk along the way.

Financial planning is important because many people do not put much time into thinking about their financial future. It's human nature to focus on short-term needs and to put long-term needs on the backburner.

However, planning makes it easier to create some certainty around your financial future and manage any obstacles to achieving what you want. It's well worth placing this on your agenda sooner rather than later.

What does it cover?

Some of the areas and strategies that a financial plan should cover include:

• What your savings goals are and how to reach them. Do you want to fund holidays? Buy an investment property? Send your children to a private school?
• Increasing wealth and reducing your liabilities, like paying off your mortgage or other loans quicker.
• Planning for retirement and increasing your superannuation through tax-minimisation strategies. Making tax-effective contributions can help reduce tax and increase your superannuation balance, using a range of retirement products to meet your income needs.
• Building a diversified investment portfolio. Having a mix of assets can help to reduce overall risk to your investments.
• Protecting your income and assets (e.g. by using a range of insurance products to ensure the risk to you and your family is minimised).
• Planning for your children's future.
• Making sure a child with a disability is looked after when you're gone.
• Paying for aged care accommodation when you can no longer look after yourself.
• Making sure your estate planning wishes are fulfilled when you are no longer around.