What is a financial plan?

A financial plan is best described as a comprehensive strategy for managing financial resources. This means it encompasses a wide range of factors including budgeting, savings, investments, retirement planning, insurance, taxes, and estate planning. Such a plan is tailored to an individual's or family's specific needs and goals, helping to set clear objectives and outlining the steps necessary to achieve them.

While filing taxes is an important aspect of personal finance, it does not represent the overall scope of a financial plan. Similarly, a forecast of monthly expenditures or an estimate of future income are components of financial management but do not encapsulate the entirety of a financial plan. A well-formed financial plan integrates all these elements to provide a holistic approach to one's financial health and future security.