The first stage of the financial planning process constitutes assessment on what is happening in your life right now and how you can change your financial situation. The key areas to reflect are:
Household budgeting –This is an important area as after calculating the monthly costs spent at home, you’d be able to figure out how much you are left with to save or invest.
Family commitments and Living Expenses – Are you single or married? Do you have children? What are their living and lifestyle expenses?
Tax Standing and Strategies – How do you manage taxes? Are you living or working abroad?
Current investments or saving reserves – How much savings or debts you have right now?
Other Financial obligations – These may involve some miscellaneous costs you might be planning ahead for future such as:
• A wedding or property purchase
• Emergency funds to cover for household catastrophes
• Family Funds reserve in case something happens with your job or you
• Is your retirement just around the corner?
This step serves as a foundation for developing your plan and gives you a good reference point to achieve your short as well as long term financial goals.