Financial PlanningFinancial Planning
A financial planning worksheet in combination with professional financial planning is the process of arranging your finances to meet your personal goals and objectives for the future. By properly planning your finances, you are setting a roadmap to get from "point A" to "point B." The financial planning process can be complex or simple, depending upon your set objectives. In our attempt to help you get to "point B," we have put together a financial planning section of our blog. We hope that you find the articles to be both informational and useful. When you’re ready, we can help facilitate a comprehensive financial analysis by using our proprietary financial planning worksheet solution.
Remember: These articles are meant to be educational only, and are not specific recommendations regarding any particular financial planning methodology. To implement specific advice into your overall plan, please schedule time to meet with a qualified financial advisor.
Emergency Funds Become Critical During Volatile Years
Emergency funds are needed to meet unexpected expenses that are not planned for in the family budget, such as short-term illness causing a loss of income, unexpected medical expenses, property losses that purposely are not covered by insurance (deductibles and co-insurance) and to provide a financial cushion against such personal problems as prolonged unemployment or some other financial crisis.
The need for emergency funds have received greater attention in recent years. Many capable people have lost their jobs because of mergers and acquisitions, economic dislocations or plant closings. A reasonable emergency fund can help to prevent a temporary unemployment from becoming a personal financial crisis. The fund will give the family time to adjust without having to drastically change its living standards or disturb other investments.
Beware Phony Credentials When Selecting a Financial Advisor
Credentials, expertise, education, experience and ethics matter, which is why those that work for years to achieve legitimate credentials scoff at those that attempt a short-cut to credibility.
The Measurable Benefits of Having a Financial Plan in Place
You hire a planner. You pay a fee. What do you get in return? You get two very different kinds of benefits. You get psychological benefits, and you get monetary benefits.
The psychological benefits are yours. You keep them. They include things like increased peace of mind, progress toward reaching your goals, without worry about unfinished business.
The Financial Planning Process: 5 Essential Steps
The financial planning process involves five basic steps. After the initial meeting with your financial planner, the five steps to the financial planning process include: data gathering, plan preparation, plan presentation, plan implementation, and on-going monitoring.
Financial Planning Process: Data gathering.
Data gathering is a marathon. It usually takes place at your home. It may take two hours or all day. Your planner will need to examine all your documents: Tax returns. Balance sheets. Income statements. Employee benefit plan booklets. Retirement plan documents. Wills. Trusts. Insurance policies. Investment statements. Brokerage house statements. Bank statements. These are the tangible bits of information.
What to Expect When Developing a Financial Plan
Once you select a financial planner, what happens then? What is the process of creating your financial plan? Financial planning addresses everything that has to do with money. With your adviser's help, you'll leave no financial stone unturned. Should you refinance your mortgage? Should you buy or lease a car? What should you do with the inheritance from your grandmother? How can you get more tax-sheltered dollars out of your professional corporation? Where do the answers come from? They come from the "subsets" of financial planning -- things like cash flow management and tax planning. Let's look at a few of the most common.