Do you view financial planning just as a tool to save for retirement? It’s so much more than that. Financial planning involves your day-to-day money management as well as your plans for the future. Want to buy a house? Having a baby? Taking the trip of a lifetime? Then you need a financial plan.

Financial planning will help you manage your money now, prepare for the future and protect you from the unexpected. There are six key areas you need to address when building a financial plan.

Cash management

Although cash management may not seem like a planning exercise, it’s an essential part of your financial plan. Cash management strategies, including developing and following a budget, ensure you have income to take care of your basic necessities and taxes with money left over to put toward your long-term financial goals.

Debt management

Managing credit and reducing debt and interest on debt should be a key part of your financial plan. Credit, when used wisely, can play an important role in your cash management strategy. When used poorly it can lead to financial hardship and even bankruptcy. It’s important to learn to use credit wisely and not let your debt get in the way of achieving your goals.

Insurance planning

Insurance protects your assets, your income and your standard of living. An insurance plan will allow you to identify the risks you may face and put the right protection in place. Protect you and your family in case of death, illness, disability or job loss. Ensure you’re covered for a house fire, car accident or cancelled vacation. Whatever the reason, insurance can lessen the impact of a negative situation on your long term financial goals.

Investment planning

Investment planning is about setting goals, assessing your tolerance for risk and finding the right investment plans and products to meet your goals. Investing is commonly used in retirement planning but it can also be used to help you reach other financial goals.

Retirement planning

Retirement planning doesn’t look like it used to. Gone are the days when most people stayed with one company until they were 65 and retired on a pension and some savings. Today most people need to take a more active role in their retirement planning to ensure they have enough money to retire on.

Estate planning

Some mistakenly think estate planning is simply preparing a will. While a will is one component of an estate plan, there are many other factors. Planning your estate allows you to safeguard your estate so that it will be distributed in the way you want. One aspect of estate planning allows you to assess your needs and develop a plan to help you care for your loved ones when you’re gone. Another aspect ensures you have the right people looking after your interests if you become incapable of doing so.