Tips on Financial Planning

They say no battle plan survives first contact with the enemy. The same can be said of financial planning. It will take a lifetime of adjustments to reach your financial goals. But without any plan you may feel like your constantly walking a tight rope without a net. Whatever your current situation is if you haven't done any financial planning the time to start is now.

  • Gather information
  • Establish goals
  • Assess your current finances
  • Create a strategy

What is financial planning all about?

By creating a financial plan you're simply making a road map for your financial life. You're taking stock of where you are now, where you want to go and how you're gong to get there. Goals may include things like purchasing a home, paying for college or saving for retirement. By understanding where you want to go you will be able to see the impact of every financial decision that you make. Your financial plan will help you to make adjustments to your spending, saving and investing with your long and short-term goals in mind.

Where should I begin?

  1. Gather all of your financial information; bank statements, investment portfolios, mortgage statements, bills, tax statements, insurance policies or anything else that may impact your finances.
  2. Establish your goals. How much money will you need to pay for your child's education and how long do you have to save for it? How much will you need to retire?
  3. Make an honest assessment of where you currently stand; debt, cash flow, savings, etc.
  4. Develop strategies to meet your goals. These might include things like investing in 529 college savings accounts or 401K retirements accounts.
  5. Take action and begin implementing your plan.
  6. Monitor your plan and make adjustments after experiencing "first contact with the enemy."

There are many great resources available to help you create a personal financial plan. You can start at your local library or check out one of the many software packages available. There is also a great deal of information online just be sure to go to a trusted sources like a U.S. government site.

Getting professional help

If the whole process seems overwhelming there are a number of different professional services out there to help you establish your goals and reach them successfully. These include:

Financial Planners - certified to help you through the entire process and evaluate your long-term goals.

Accountants - must be certified and licensed. Can assist on taxes.

Estate Planners - many are accredited and can assist you with estate taxes and planning for your will. You'll want an attorney to prepare the will itself.

Stockbrokers - licensed to buy and sell securities such like stocks, bonds and mutual funds.

If you think financial planning is something for the financially secure and not folks who struggle with their finances day-to-day ask your self this...how do you think they got there?

Sources:
http://pueblo.gsa.gov/cic_text/money/aboutfinan-planning/aboutfpbroc.html

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