Step 1 determine your current financial situation step 2 identification of objectives and needs
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Answer:
We’ve divided the financial planning process into three steps:
Evaluate your current financial status by creating a net worth statement and a cash flow analysis.
Set short-term, intermediate-term, and long-term financial goals.
Use a budget to plan your future cash inflows and outflows and to assess your financial performance by comparing budgeted figures with actual amounts.
Just how are you doing, financially speaking? You should ask yourself this question every now and then, and it should certainly be your starting point when you decide to initiate a more or less formal financial plan. The first step in addressing this question is collecting and analyzing the records of what you own and what you owe and then applying a few accounting terms to the results:
Your personal assets consist of what you own.
Your personal liabilities are what you owe—your obligations to various creditors, big and small.