Financial planning is the process of setting goals for your financial future and creating a strategy to achieve them. It involves assessing your current financial situation, including income, expenses, savings, and investments. By understanding where you stand, you can make informed decisions about budgeting, saving for retirement, and managing debt. A key component of financial planning is creating a budget, which helps you track your spending and allocate funds toward important areas like emergency funds, education savings, and retirement accounts. Regularly reviewing and adjusting your financial plan ensures that you stay on track to meet your goals and adapt to any changes in your life.