PRINTABLE LEARNING MATERIAL

Module 3- Topic1: Steps in the Financial Planning Process

LEARNING OUTCOME:
Identify the steps in the financial planning process. (ABM_BF12-IIIc-d-10)

6 Steps for Personal Financial Planning

According to Kent Thune, in his article from the balance, the six steps of financial
planning are required to know and follow these steps, starting with establishing the
advisor/client relationship, all the way through implementing and monitoring the plan.
The image below are the six steps for successful financial planning:

(The image above is lifted from: https://www.thebalance.com/the-6-steps-of-financial-planning-2466498)

Steps of Financial Planning Process for the Company:

Step 1: Evaluating Your Current Financial Situation

 Preparing Your Net-Worth Statement- (Assets − Liabilities = Net worth)

 Knowing the company’s assets
 Knowing the company’s liabilities
 Preparing a cash flow statement

Step 2: Set Short-Term, Intermediate-Term, and Long-Term Financial Goals

 Short-Term- less than 1 year.

 Intermediate-Term- 1-5 years.
 Long Term- more than 5 years

Step 3: Develop a Budget and Use It to Evaluate Financial Performance

 Figuring the variance by using budget vs actual.

(Lifted from: https://saylordotorg.github.io/text_exploring-business-v2.0/s18-03-the-financial-

planning-process.html)

Licensing & Attributions / References

 Dotdash. (n.d.) Retrieved December 14, 2020, from https://www.thebalance.com/the-6-steps-of-financial-
planning-2466498
 The Financial Planning process. (n.d.). Retrieved December 14, 2020, from
https://saylordotorg.github.io/text_exploring-business-v2.0/s18-03-the-financial-planning-process.html