Best Dimensions of Financial Planning

Best 7 Dimensions of Financial Planning

Financial planning is the process of designing and implementing a financial plan to achieve specific financial goals. Dimensions of financial planning includes preparing a budget, creating an investment strategy, creating an estate plan, and more.

Financial planners can help individuals understand their unique financial situation and develop a plan that will help them reach their financial goals. Financial planning is an important part of life, and it is important to have an experienced planner help you create a plan that works best for you.

What is Financial Planning?

One of the most important steps in achieving financial security is to have a financial plan. A financial plan can help you make informed decisions about your money and give you a roadmap to follow to reach your financial goals. But what is financial planning, and how can it help you?

Financial planning is the process of creating a strategy for managing your finances. It includes setting goals, developing a budget, investing money wisely, and protecting your assets. A good financial planner will work with you to create a plan that fits your unique situation and helps you achieve your financial dreams.

A financial plan can provide peace of mind by giving you a clear path to follow and helping you stay on track with your finances. It can also save you money in the long run by helping you avoid costly mistakes.

Different Dimensions of Financial Planning

There are many different dimensions of financial planning. The most important dimension is your overall goal. But few dimensions of financial planning are as follows:

Prepare a Budget

When you sit down to create your budget, you’re really starting on the road to financial planning. A budget is one of the key dimensions of financial planning, and it’s essential whether you’re trying to get out of debt, save for retirement or just keep your spending under control.

Creating a budget may seem like a daunting task, but it’s really not that difficult. You just need to gather some basic information about your income and expenses. The first step is to list your sources of income and how much money you bring in each month. Then, list your regular expenses, such as rent or mortgage payments, car payments, utilities and groceries.

Don’t forget to include periodic expenses such as property taxes, insurance premiums and car repairs. Once you have all of this information compiled, it’s time to start creating a budget.

Create an Investment Strategy

Creating an investment strategy is one of the most important dimensions of financial planning. There are many factors to consider when creating an investment strategy, including your age, risk tolerance, investment goals and time horizon.

Your age is an important factor to consider when creating your investment strategy. Young investors can afford to take more risks with their money, since they have more time to make up any losses. Older investors should be more conservative with their investments, since they may not have as much time to recover from a loss.

Your risk tolerance is another important factor to consider when creating your investment strategy. If you’re comfortable taking risks, you may want to invest in stocks or stock mutual funds. If you’re more conservative, you may want to invest in bonds or bond mutual funds.

Your investment goals are also important when creating your investment strategy.

Asset Allocation

When it comes to your finances, it’s important to have a plan. One of the most important aspects of financial planning is asset allocation. Determining how to distribute your assets is essential for optimising growth potential and minimising risk.

There are a few key things to keep in mind when allocating your assets: 

  • Your age and stage in life should be taken into account-Younger investors should have a higher percentage of their portfolio in stocks, while those closer to retirement should have more in bonds and cash equivalents
  • The level of risk you’re comfortable with should also be considered-Some people are willing to take on more risk in order to achieve higher returns, while others prefer stability and lower risks
  • Your investment goals should be considered-Are you looking for immediate income, capital gains, or long-term growth?

Tax Planning

Tax planning is an important part of financial planning. It is important to do your research and understand the different deductions and credits available to you. You may be able to save money on your taxes by taking advantage of these tax breaks.

There are a number of things you can do to reduce your tax liability. You can make contributions to a retirement account, such as a 401(k) or IRA, which will lower your taxable income. You can also take a deduction for your mortgage interest or charitable contributions.

Be sure to keep track of all of your expenses throughout the year. This will help you determine which deductions you are eligible for. If you have any questions, consult with a tax professional. They can help you find the best way to reduce your taxes and keep more money in your pocket.

Retirement Planning

When most people think about retirement, they imagine a time when they can finally relax and enjoy their golden years. However, if you want your retirement to be comfortable, you need to start planning for it well in advance. Here are a few tips on how to ensure a comfortable retirement:

  1. Start saving as early as possible. The earlier you start saving for retirement, the more money you’ll have in the long run. Try to create a budget and stick to it so you can easily save money each month.
  2. Invest your money wisely. Investing your money is a great way to secure a comfortable retirement. Choose investments that have the potential to grow over time so you can maximise your savings.
  3. Review your expenses regularly. It’s important to keep tabs on your expenses so you know where you can cut back and save more money for retirement.

Estate Planning

When you think about estate planning, the first thing that comes to mind is usually death. However, estate planning is actually much more than just preparing for death. It’s really about taking control of your life and your future, and making sure that your loved ones are taken care of after you’re gone.

One of the most important things to consider when estate planning is how to protect your assets from creditors. If you die without a will or proper estate planning in place, your assets may be vulnerable to creditor claims.

A trust can help protect your assets from creditors, and can also provide a means of distributing them to your heirs according to your wishes.

Another important consideration when estate planning is life insurance. If you die prematurely, life insurance can help ensure that your loved ones are taken care of financially.

Insurance Planning

You’ve likely heard the old saying, “if it’s worth doing, it’s worth doing well.” Applying that ideology to your finances means taking the time to adequately insure yourself and your loved ones.

One of the most important aspects of financial planning is insurance planning. Unlike other investments, insurance is designed to protect you and your family from unforeseen disasters. That’s why it’s so important to have the right type and amount of insurance coverage.

There are a variety of factors you need to consider when drafting your insurance plan. First, you need to assess your risks and identify potential hazards that could impact your family financially.

Second, you need to find the right type of coverage for those risks. And finally, you need to make sure you have enough coverage to protect yourself and your loved ones in case of an emergency.

The Financial Planning Process

The process of financial planning is one that should be approached with a clear understanding of its various dimensions:

Developing a Financial Plan

Developing a financial plan is one of the most important steps you can take to secure your financial future. By creating a plan, you can identify your goals and map out a strategy to achieve them. A financial plan should include:

  1. Your income and expenses
  2. Your assets and liabilities
  3. Your long-term goals and how you plan to achieve them
  4. Your short-term goals and how you plan to achieve them
  5. The steps you need to take to implement your plan
  6. The risks and uncertainties that could affect your plans
  7. The costs associated with implementing your plan

Implementing a Financial Plan

If you want to improve your financial situation, one of the most important things you can do is implement a financial plan. This plan will help you set goals and track your progress over time. There are a few key steps to creating a financial plan:

  1. Figure out where you stand financially. This includes assessing your income, debts, and expenses.
  2. Set financial goals. What do you want to achieve financially? Whether it’s paying off debt, saving for retirement, or buying a house, make sure your goals are specific and measurable.
  3. Create a budget. This will help you make sure you’re spending within your means and reaching your financial goals.
  4. Stick to your budget! One of the biggest challenges of implementing a financial plan is sticking to it long-term.

Reviewing and Adjusting a Financial Plan

Assuming you have created a financial plan and have been following it, it’s important to review and adjust it periodically. This is especially true if there have been any major life changes, such as a job change, marriage, or the birth of a child.

Reviewing your financial plan will help ensure that you are still on track to reach your goals. If you need to make any adjustments, now is the time to do so. You may need to save more money or reduce your spending in order to stay on track.

It’s also important to keep in mind that your financial plan should be flexible. If something comes up that was not anticipated, be sure to revise your plan accordingly. The goal is to stay disciplined and make progress towards your goals, but not be so rigid that you can’t adapt when necessary.


In conclusion, financial planning is an important process that should be considered by everyone. There are many dimensions to financial planning, and each person’s situation is unique. It is important to consult with a professional to create a plan that is tailored to your specific needs.


A financial planner is someone who helps you plan your finances, whereas an accountant is someone who helps you file your taxes and keep track of your money. Financial planners typically offer a wide range of services, such as retirement planning, investment advice, and estate planning. Accountants are more specialised, and usually only offer tax preparation and bookkeeping services.

A financial planner typically helps people with their day-to-day money management, such as budgeting and saving for retirement. An investment adviser typically helps people invest their money in stocks, bonds, and other securities.

The cost of a financial planner varies depending on the services they offer. Typically, financial planners charge a percentage of the assets they are managing for you. For example, if they are managing $100,000 for you, they may charge 1% or $1,000 per year. Some planners may also charge an hourly rate or a flat fee for specific services.

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