6 important Steps to Financial Health


Important financial planning

Financial Planning is an important part of any wealth-building or wealth creation.  There are 6 steps to proper financial planning which are usually taken by a Financial Planner

Set Clear Financial Goals

Gather Information

Analyze Data

Develop a Plan

Implementing Your Financial Plan

Period Review

  1. Set Clear Financial Goals

The most salient part of proper financial planning is your financial goal. It is therefore important to set clear, realistic, and achievable goals.

For example, if you intend to retire in five years’ time with $500,000 and you are only earning $3,000 a month, it will be quite an unachievable feat. Even if you were to save every cent of your monthly payments, you will still need to find an investment instrument that gives a return of close to 40% per annum. While there are investments that give that kind of returns but the risks will be very much higher. If that is the case, you will probably need to lower your cash expectation or retire a few years later.

    1. Gather Information

    After you have clearly defined your financial goals, your Financial Planner will collect some relevant financial information from you. Your Financial Planner will need to know your liabilities and assets including all your insurance policies and investments. You will also determine or let him or her know how much money you think your dependent will need if you were to die prematurely or unable to work further.

    1. Analyze Data

    The Financial Planner will take some time to digest the information to understand your situation.

    1. Develop a Plan

    Your Financial Planner will then formulate a plan according to your financial needs and risk profile and of course your budget as well.

    1. Implementing your financial plan

    Once you are comfortable with your financial plan, you will have to implement it. If not, it would be a meaningless exercise.

    1. Periodic review

    A good Financial Planner will conduct a review with you annually on how well your financial plan has progressed and whether you are on track to achieve what you have set out to. Sometimes, you may need to tweak your financial plan when you get a pay rise, get married, have kids, bought a new house or car.


    In summary, the 6 steps above are essential things you have to do (albeit with the help of a Financial Planner) to a good Financial Health.

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