Financial Planning Process Steps

Whenever we start a new venture, the first thing that we invariably do is planning. And when it comes to finance and business, needless to say, planning becomes an indispensable activity. So what is financial planning? Financial planning can be termed as a process in which financial needs are assessed first, objectives to achieve monetary goals are set (which include investments) and assets and resources are evaluated and ways to increase them are devised. Why is financial planning important? Of course! This is important! This activity not only allows the person to learn about planning his finances but also helps him understand the importance of cash flows and investments that come handy in the most unexpected situations. How is financial planning done? Yes, this is what this article is all about: the financial planning process steps! Keep reading.

Steps in Financial Planning

Financial planning is an integral part of financial management. This activity requires a lot of study and research, before one goes about drawing a plan and implementing it. Not to miss an important point on this subject, risk assessment is an integral part of any planning. So let's understand the key financial planning process steps. Below are the key steps to consider in your financial planning process.

Identifying Financial Needs
The primary responsibility in the financial planning is conducting a need analysis. An investor has a number of needs of which he needs to prioritize the important ones and plan accordingly. The important goals which are preset are, education of children, down payment of a house, health requirements, life insurance and retirement. Following these needs are the means to increase the wealth in terms of cash and property. Also a person needs to have concrete answers for the following questionnaire:

    What are your investment goals?
    How much money do you have for investments?
    Do you invest in stocks, bonds and mutual funds?
    Are your financial needs short term or are you headed for long term financial planning?
    What benefits are expected from your investments?

Gathering Financial Data
Now that you have identified the financial needs, the second step should be to consolidate your financial planning worksheet to understand your cash flow, investments and liabilities. This can consume a day to week's time depending on your needs. Take the help of a financial planner who would help you out with this marathon. The documents needed for this process would include:

    Assets, Liabilities, tax deductions and tax returns
    Balance sheets
    Income and expenditure statements
    Employee benefit plan booklets
    Retirement planning documents
    Wills and trusts
    Insurance policies
    Investment statements
    Brokerage house statements
    Bank statements

Besides, the planner will also require some more data like:

    What is your retirement age?
    What income is anticipated post retirement?
    How would you want your property to be distributed?
    What is the current economy state and where is it headed towards?
    How much inflation can occur in near future?

The planner will also make a risk tolerance assessment of your personal attitude (aggressive, moderate or conservative) towards financial affairs and at the end of the data gathering process, he is bound to get a hang of what is your current financial state and what it will be or can be in near future.

Developing the Financial Plan
Here starts the actual work of your financial planner who has to devise effective means of developing a fool proof financial planning process. Steps to develop the financial plan start with the following:

    Documenting your plan to fulfill protection, health and retirement. Also wealth creation and preservation requirements are included.
    Explaining to you about the pros and cons of every rationale included in the plan (keeping in mind the risk appetite of the investor: you).
    Understanding the tax laws and the financial operative framework of the system.

Presenting the Financial Plan
Once the financial plan is well documented, your financial planner will proofread it and present it to you. In the first round of presentation, you have to study the documentation thoroughly, with your spouse. Take your time, and if you have doubts, jot them down in a list and pass them on to your planner. He will give you clear answers for all the doubts raised and then once you have agreed, the planner will make an implementation checklist. So the next mode of the financial planning is implementing the well documented financial plan into action.

Implementing the Financial Plan
This is a pivotal phase of the financial planning process steps. And also this period takes longer time (approx. 4-6 months) than the previous stages of the financial planning. During this phase, intricate details like tax planning, retirement planning, insurance concerns and estate/property planning are discussed thoroughly. To get a clearance on certain issues, attorneys may be involved for guiding and helping out with certain queries. Quite possible, that at the end of the implementation, your financial plan may have more than 20 recommendations (of which some may be major and strategic). So, it depends on you and your planner as to how you want these recommendations to be incorporated. But yes, your financial plan is now ready!

Monitoring the Financial Plan
Once the plan is on roll, it does not mean that the financial planner is required no more. He has to be retained to provide you with periodic updates on portfolio reviews, insurance updates, investment options, tax planning sessions and changing market conditions. Besides, you need to keep your ears open to the planner's alerts on risks that can possibly crop up due to fluctuating economical conditions.

Hope this article on financial planning process steps was informative! So now, you might have understood the importance of financial planning and also you must have understood personal financial planning process steps! One could say, if the planning is complete, your job is halfway done! So, prepare your financial plans meticulously and reap the financial benefits. After all, every penny invested is every penny earned!

Small Business Grants for Veterans

The Obama administration recently passed the American Recovery and Reinvestment Act (ARRA) of 2009 which set aside 787 billion dollars to revitalize the ailing economy. Out of the 787 billion dollars 275 billion dollars have been earmarked as federal government grants. You can avail small business grants for veterans from this sum if you meet the strict eligibility criteria. Financial assistance received through government grants is the best way to fund a business as the money need not be repaid.

The government grants are mostly given to non profit organizations and institutes working towards the betterment of society. The government also provides financial aid to business dealing with renewable energy and energy efficiency solution providers. The Obama government has even set up a task force on veterans small business development to support veterans run and start their businesses.

Small Business Assistance for Veterans

If you are looking for small business grants for veterans then one of the things you could do is talk to the officer with the Small Business Administration (SBA). The SBA has set up the Office of Veterans Business Development and you can check out the location of an office near you on the SBA website. The SBA is also the right place to check for small business grants for disabled veterans and small business grants for women.

Another resource for checking small business government grants for veterans is the Catalog of Federal Domestic Assistant (CFDA) website. The website has free details of over two thousand federal assistance programs. The website also has a help desk number which you can call for assistance regarding government small business grants and loans.

The local chapter of the Chamber of Commerce is also a good start if you are looking for small business loans and grants for veterans. They have several funding opportunities and if you fit the eligibility criteria you could qualify for a grant and if not you could check their list of available loan opportunities. They have specific grants like small business grants for minorities and women which you could apply for.

If you have seen advertisements that offer small business financing for veterans for a small fee, stay away as most of the information they offer is available free on the government grants website. If you have identified the grant which best qualifies you from the CFDA website, you can use the CFDA number to apply for that particular grant on the governments grant website.

There are several new funding opportunities under the American Recovery and Reinvestment Act of 2009 (ARRA) which a veteran can take advantage of. The details for these new opportunities is made available by the administration on its government recovery website. The 275 billion dollars worth of grants are set to be made available over a period of ten years with most of them being given out in the first three years.

Another resource for small business loans for veterans are the non profit organizations (NPOs). There are many NPOs who work for the betterment of veterans and their families. The Internet is the best resource for finding an organization which will accommodate your needs. Try organizations like 'Rotary' as they have lot of community development programs under which they could provide financial help for veterans.

The US Department of Commerce has a Minority Business Development Agency (MBDA) which is another place for you to check for small business grants for veterans from the minority community. It is advisable to invest some time in researching for grants as the financial reward is well worth the effort.