What are the Goals of Financial Planning and Management?

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  • Written By: Lainie Petersen
  • Edited By: Melissa Wiley
  • Last Modified Date: 15 February 2020
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The goals of financial planning and management are to help individuals, couples, and families to establish workable budgets, meet their financial needs, and maintain financial reserves so as to provide for both financial emergencies as well as retirement. Personal financial management can be undertaken by individuals or couples themselves, or they may seek the advice of a professional financial planner or advisor. In both cases, it is important for the individuals to carefully identify, explore, and articulate their financial needs and desires. With this information, financial planning and management can help these people reach their goals and live lives that are productive, prosperous, and hopefully free of financial stress.

One of the initial goals of financial planning and management is helping individuals and families understand their income so that they do not exceed their financial resources. This typically means establishing and sticking to a realistic budget. A good financial planner, or an individual who has educated himself on basic personal finance, should be able to examine household expenditures and identify areas in which a person may be overspending, thus potentially causing financial stress. Once a good household budget is established, one that provides for household and personal needs as well as debt reduction and savings, it can be easier to free up cash that can be used for long-term financial planning and management.


Fiscally wise individuals should also have a plan for long-range needs. For example, a couple or individual may desire to eventually purchase a home or business. A financial planner can assist this couple in developing a portfolio management plan that can maximize investments so that the dream of a home or business purchase can be achieved. Similarly, a couple or individual may wish to ensure that they will be able to retire comfortably at a certain age. A good program of financial planning and management can help such people, even those who earn a modest income, develop a financial plan that will allow them to eventually be able to live off the interest of their investments as well as any pensions or Social Security income that they may receive.

In some cases, expert financial planning and management may be necessary for individuals and families who have special needs. For example, a family may have one or more members who have disabilities and must be provided for financially over the long term. On the other hand, a family may also have weathered a significant financial crisis, such as bankruptcy, and may require special assistance in regaining their financial footing. In such cases, individuals or families may wish to select a financial professional with expertise in their special situation.



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