How Does Financial Planning Work For You

Financial planning is a process that will help in realizing your goals and dreams. It allows you to structure your finances with a systematic approach. This helps in taking control of your spending, budgeting, savings, investments, etc. while bringing them together to work for a common goal, i.e., financial independence. 

With the right financial planning structure supporting you throughout your life, you will be able to gain financial freedom rather quickly. Even in times of inflation, pandemic, or recession, individuals with a good financial plan will be better off than those without a financial plan. In this article, we will discuss how a financial plan works for your benefit and whether it is beneficial to become a certified financial planner

What is Personal Financial Planning?

A personal financial plan is a comprehensive itinerary covering the present and future periods of your life. The right financial plan safeguards you and your family from unprecedented financial hardships and pandemic-live unpredictable events. 

Within the plan, you will include your earnings or income, current savings, investments, debt (if any), insurance, and expenses. Ultimately, you can use a financial plan to pay off any sort of debt and then save for a mortgage or to enjoy your life with your hard-earned money. 

To create a financial plan, you first need to establish your financial goals and objectives. This involves asking questions like where do I want to see myself in the next 10, 20, or 30 years? What will be my significant future expenses? etc. Note the answers on one side, and then work on your earnings and income. 

The general thumb rule of budgeting is 50-30-20. This means that you must save at least 20% of the after-tax income. However, with strained financial circumstances and low income, fulfilling this rule might be difficult. Plus, you also have to take care of the emergency funds, so there is the big question of “Whether I should invest in crypto?”

All these aspects are answered and solved by financial planners. Financial planners are professionals who help individuals and organizations build and implement financial plans to help them achieve their goals. 

At IMS Proschool, we are building the next generation of financial planners with the help of an extensive curriculum and addressing the conventional plus future challenges aspects of this field. We provide practical, theoretical, and experiential training to students helping them prepare well for every aspect of financial planning today and in the future. 

What are the Benefits of Personal Financial Planning?

Building financial security is pivotal for every individual. It not only gives you peace of mind but also safeguards you from sudden losses and emergencies. So, here are a few benefits of building your financial plan. 

  • Goal Setting and Achievement: The right financial plan always begins with setting financial goals. Right now, if you don’t have financial goals, making the plan will certainly help you create them and then build the plan to achieve the same.

    Whether your goal is to live independently without taking help from your parents, you wish to buy a new house in the next five years, or you want to buy your dream car, everything is achievable if you have the right plan.

    So, a financial plan helps you set goals and then achieve them with proper structuring. It will help you calculate how much you have to put aside to achieve the goals and how to customize the budget, ultimately allowing you to make smart decisions.


  • Create and Follow a Monthly Budget: With a set plan, you will exactly know how much you can spend in a month. With this information, you can easily pre-plan your monthly expenses. In a certain month, you have to make extra expenses; you can reduce expenditure on another item.

    Going with the budget, you will be aware of your current financial situation at all times and how much you can invest, save, spend, and splurge in the month. And if you get bonuses and rewards, you can easily allocate that money without having to consult anyone.


  • Safeguard for Emergencies: It is said that any mishap or disaster won’t knock on the door before it happens. The prerogative of preparing yourself to remain financially stable during tough times and emergencies is on you. With a financial plan, you can always put some money aside regularly in the name of an emergency fund.

    You can use this fund in case of emergency, be it medical, business, or caused due to an event like the pandemic. However, if you already have a financial plan and are working to maintain it, you can survive the emergencies with the saved funds.


  • Secures your Retirement: How much do you need to save so that you can live an easy and comfortable retirement life? Well, if you would have created a financial plan, you would have a figure right now. A financial plan gives you the freedom to retire with a good amount of money to spend, or it can even allow you to take early retirement.

    When people want to retire early or retire at the right time, sometime financial hardships might come in the way. Even with individuals earning enough money to save for their retirement, they cannot because of the absence of a financial plan.


  • Gives you Peace of Mind: A person’s peace of mind depends on several factors, including money. Lack of money can disturb the peace, and having enough money can keep one’s worries at bay. So, with a financial plan, you will learn to stay well fortified with money and ultimately gain peace of mind.

    Financial planning is a serious job, and the people working helping individuals must undergo special training and have the right knowledge about finances, money, investments, savings, and a lot more.

Is Financial Planner a Good Career Option?

A financial planner does the job of helping people set up their finances, invest in the right places, and help them save money. They help them set achievable financial goals and give suggestions to increase their disposable income. 

So, yes, it’s a great career choice, but only if you have the right training and the required skills to complete the work. 

In terms of earnings, financial planners average $75,585 per year in the USA. In India, they earn upwards of ₹4,50,000 per year. However, in both countries, earnings can scale up with better experience and job prospects. 

You can always set up your firm in this field and work as an independent contractor. However, for a job, you can trust that companies in banking, finance, wealth management, taxation, auditing, portfolio management, investments, insurance, and financial advisory niches will have a vacancy. 

How to Become a Certified Financial Planner?

To become a certified financial planner, you need to pass the Certified Financial Planner (CFP) exam. The exam gives you the formal recognition required to secure a well-paying job in the financial world. In addition to this, you also need to have a formal educational background, relevant work experience and demonstrate professional ethics in the field. 

To reach the exam stage, you need to gain the educational requirements. So for your education, you can choose to pursue a degree in accounting, finance, economics, law, business, or math. Or you can choose a degree that has a combination of two or more than two subjects mentioned above. 

With the degree, you will be able to build a foundation for the course. You can pursue other career options than these before taking the CFP exam, but in that case, you might have to study and prepare harder because of the lack of the right base. 

Education is the first requirement to gain CFP authentication. The second one is an Exam. You must attempt a 170 multiple choice questions exam in two 3-hour sessions. 

There are stand-alone and scenario-based questions you will have to answer. And then, there are case study questions. 

The third requirement is Experience.  To get the certificate, you need to have at least 6000 hours of professional experience in a field related to financial planning. Or you can gain 4000 hours of apprenticeship experience. 

You can get this experience either before or after taking the exam. Even if you have passed the exam, gaining the required experience is essential to get the certification. 

The last requirement is Ethics. This represents the final leg of your journey to becoming a financial planner and gaining certification. This is where you must comply with ethical and professional standards while practicing financial planning. 

As a financial planner, you will have a ton of responsibility for handling and managing your client’s future and their money. So, the job comes with a pre-loaded responsibility which you must fulfill and always provide the best advice to the clients. 

You need to understand and learn how to put the client’s best interests first. The CFP Board will ask you to sign an Ethics Declaration. At the time of signing, they will also run a background check to assure and verify your identity. 


For an individual to gain financial freedom means they can live an easy and peaceful life or even get early retirement. To get there, individuals need a robust financial plan that will allow them to save money and invest it in the right channels. You can always hire a financial planner and ask them to create a plan. Make sure to follow the plan and if you want to become a certified financial planner and build a career in this field, get in touch with IMS Proschool. We provide future financial planners with the right education and guidance to clear the CFP exam and gain their certification.