FINANCIAL PLANNING
There are eight key components of financial planning. A Net worth statement, setting financial goals, budgeting, debt management, investment planning, retirement planning, estate planning, and risk management.
Net Worth Statement
Knowing your worth today will serve as a baseline for framing your financial goals and setting a target for your net worth at some point in the future, like in retirement. To determine your net worth, make a list of all your assets (bank and investment accounts, real estate, valuable personal property) and then list all of your liabilities (credit cards, mortgages, or student loans). Your assets minus your liabilities equals your net worth. Click the link below to access our net worth worksheet and get started today.
Financial Goals
Defining your financial goals (short-term and long-term) is the foundation of a financial plan. These goals can include things like saving for a down payment on a house, paying off debt, or planning for retirement. You can’t make a financial plan until you know what your want to accomplish with your money – so whether you’re creating it yourself or working with a professional, your plan should start with a list of your goals and the time horizons to accomplish them.
Cash Management & Budgeting
Creating a budget helps you track your income and expenses, ensuring you know where your money is going and how to allocate it effectively. Your budget is where the rubber meets the road, planning-wise. It can help you determine where your money is going each month and help you achieve your goals along the way. Proper budgeting will result in benefits such as building up an emergency fund, increasing your FICO score, etc. Key areas to manage are savings, checking, and money market accounts as well as debit and credit cards.
Debt Management
Developing a strategy to manage and reduce debt is crucial for long-term financial health. This might involve creating a debt repayment plan or avoiding high-interest debt. Not all debt is bad debt. A mortgage, for example, can help build equity-and boost your FICO score in the process. High interest consumer debt, like credit cards, can weigh heavily on your FICO score.
Risk Management & Insurance
Identifying and mitigating potential risks to your financial plan is essential. There are several key areas which require a thorough understanding so that they can be an effective part of your financial planning. Some key areas to consider are: home and auto insurance, life insurance, and health insurance (PPO, HSA, Medicare, COBRA, long-term health insurance).This will provide peace of mind and help with contingency planning for unexpected events.
Review & Choose Investment Options
Investing your money wisely can help your assets grow over time and achieve your financial goals. This involves understanding different investment options and developing a strategy that aligns with your risk tolerance and financial goals. There are many types of investments to consider, including: your 401k, Stocks and ETFs, CDs, 529 Plans, Real Estate, and, in fact, many more.
Retirement Planning
Planning for retirement ensures you have sufficient funds to cover your living expenses in your later years. This includes saving for retirement using various accounts and strategies. Generating the income that you want to enjoy your retirement is paramount. Social Security Optimization should also be an important part of your retirement plan.
Estate Planning
Estate planning ensures your assets are distributed according to your wishes after your passing and protects your loved ones. This involves creating a will (living will), financial and health powers of attorney, medical directives, etc. In some cases, trusts (living trusts) and other legal documents may be needed.
CREATING & MANAGING A FINANCIAL PLAN IS EASIER THAN YOU THINK!
SCHEDULE AN APPOINTMENT