Financial Planning

To meet short- and long-term financial goals, it is important to plan ahead. These resources will walk you through all aspects of financial planning, teaching you to control your income, expenses, and investments in a way that best works for you.

Frequently Asked Questions

  • How do you make a financial plan?

    Financial plans help people live within their means, identify financial goals, and increase savings to help you reach those goals. To make a financial plan, you have to gather all relevant financial information, prioritize financial goals, and put a plan into action. Create a budget, and when writing down your financial goals, make sure they are reachable and realistic. To make sure your plan is effective, you need to commit to following it.

  • What is the first step in financial planning?

    The very first step in the financial planning process is to take a deep dive into your finances. This includes reviewing your monthly income, outstanding debts, bank account balances, and monthly fixed expenses. In the case of a certified financial planner (CFP), they would ask the client questions about the client’s health, values, earnings potential, risk tolerance, needs, and more. By addressing all aspects of your financial lifestyle, you’ll be better equipped to determine what needs to change, and how to improve your financial situation.

  • What are the seven steps of financial planning?

    The seven steps of financial planning typically refer to financial planners; however, an individual can follow them too. The first three steps are to understand and establish financial goals, determine your net worth, and estimate your income and expenses. Next, the steps include: reviewing your personal debt situation, allocating savings goals to reach, implementing the financial plan, and lastly, monitoring progress and continuing to update the financial plan.

  • How might taxes have an impact on your financial plan?

    It’s important to consider taxes when creating a financial plan. Depending on your individual circumstances, such as age and income, taxes can have an impact. Say saving for retirement is a main goal for you, and your place of employment offers a 401(k) plan. By choosing to enroll in the plan you will have a pathway to meet your goal, and tax advantages may be able to get you there even quicker. Also, when considering your net worth as part of the financial plan, a liability to factor in may be income taxes or taxes due on the profits of your investments.

  • What is a financial planner?

     A financial planner helps individuals reach their financial goals. It is someone who takes a comprehensive approach to their client’s finances, offering in-depth assistance with things like retirement savings, investing, taxes, estate planning, and college financing. In most cases, financial planners are certified in the practice and called Certified Financial Planners, or CFPs. CFPs have completed extensive training in financial planning and are held to strict ethical standards.

Key Terms

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