Financial planning is the process of setting and achieving your financial goals through a comprehensive approach to managing your finances. It involves assessing your current financial situation, setting goals, creating a budget, managing investments, planning for retirement, and mitigating risks through insurance and estate planning.

Financial planning helps you take control of your finances, make informed decisions, and work towards achieving your short-term and long-term goals. It enables you to handle emergencies, save for major life events, and ultimately attain financial security and independence.

Creating a budget involves tracking your income and expenses to understand your spending patterns. Start by listing all sources of income and categorizing your expenses into essentials (like housing, utilities, groceries) and non-essentials (entertainment, dining out). Compare your income to your expenses and adjust as needed to ensure you're living within your means.

The earlier you start saving for retirement, the better. Ideally, you should start as soon as you begin earning income. Starting early allows you to take advantage of compound interest, where your money earns interest on both the initial amount and the accumulated interest over time.

When investing, consider your financial goals, risk tolerance, and time horizon. Diversification is key – spreading your investments across different asset classes (stocks, bonds, real estate, etc.) helps manage risk. You might choose to invest through retirement accounts like 401(k)s or IRAs, as well as taxable brokerage accounts.