What are some examples of good financial planning?


Quick Answer

Some examples of good financial planning include a strategy in which the individual determines his financial situation, develops objectives, chooses and evaluates alternatives, and then puts the strategy into action, according to McGraw-Hill. Another strategy for good financial planning is determining long-range goals and then setting short-term objectives that slowly work up to that goal, explains Wells Fargo.

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Full Answer

An individual needs to closely evaluate elements such as income, living expenses, retirement and savings when calculating his current financial situation, explains McGraw Hill. The determination of goals is affected by the current financial condition but not solely determined by it. An individual's financial goals have to take into account the person's personal objectives as well as outside forces. Once these goals have been delineated, more than one course of action should be laid out to allow for flexibility. After this, the primary plan should be put into action and revised as necessary depending on the circumstances.

A more detailed version of such a plan includes short-term, mid-term and long-term goals, ideally building on each other, reports Wells Fargo. Establishing this type of framework allows the plan to be evaluated in steps, so the implementer can make adjustments depending on the rate of success in reaching such goals.

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