Financial planning is the process of setting goals, assessing your current financial situation, and creating strategies to manage your finances in order to achieve those goals. It includes budgeting, investing, saving for retirement, tax planning, and insurance, among other factors.

Financial planning helps you manage your money wisely, reduce financial stress, and achieve your short-term and long-term financial goals, such as buying a house, saving for retirement, or funding education. It also prepares you for emergencies and helps you make informed decisions.

Risk management in financial planning involves identifying financial risks and mitigating them through insurance (life, health, and property), diversifying investments, and building an emergency fund to protect yourself from unforeseen events.

Regular monitoring and reviewing your financial goals will let you know if you’re on the right track. You should be able to see progress toward your objectives, such as saving for emergencies, paying off debt, and building investments for future goals.

Tax planning involves organizing your financial affairs to minimize taxes legally. This includes strategies like contributing to tax-deferred retirement accounts, claiming deductions and credits, and strategically timing income and expenses. Tax planning helps you keep more of your earnings and avoid tax-related surprises.