What is financial planning?

Financial planning is a continuous process to analyze your current financial situation and then to identify the actions to be taken to solve your financial problem and to achieve your financial goal.

For instance, financial planning helps you to decide the following:

1. Should I spend now or should I save for later?
2. Should I pay off my housing loan or spend the money for renovation?
3. Should my investments focus on short term or long term?
4. Should I increase my retirement savings?
5. What type of insurance I should buy?

A true financial plan does not focus on one particular aspect or product, but instead it takes all areas of planning into consideration when making financial decisions.