Debt Management Planning
Debt Management Planning is a very important, although often overlooked, component of a comprehensive, fully integrated financial planning process. It involves analyzing each component of total household debt to determine if the types and overall level of debt one has is appropriate given financial resources, goals and objectives. Any corporate treasurer knows that having the proper debt structure is a key element in maximizing the value of the corporation. That person knows that having too much or too little debt in the corporate capital structure can reduce the value of the firm. Unfortunately, most people do not use this same framework in determining what the optimal debt structure should be for their household.
Debt Management Planning also involves analyzing a clients credit position and determining strategies for increasing credit worthiness thereby enabling the client to obtain credit on the most favorable terms.