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Wealth Management

Cheat sheet for creating a personal financial plan

By April 13, 2018May 7th, 2019No Comments
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Taking control of personal finances is one of the best ways towards jump-starting financial success. For many ready to start creating their financial future an abundance of investment options, challenging tax laws, and more leave them scratching their heads, unsure of where to begin. The right plan defines financial goals and outlines intelligent methods for aiming towards them. This year, get a firm grasp on personal finances, create financial goals, and define insightful strategies for pursuing them.  Get started today with this cheat sheet for creating a personal financial plan.

1. Begin with the End in Mind

Setting realistic goals to increase net worth gives a clear start and end point for success. Goals can be short- or long-term.  The same goals may be long- or short-term depending on the individual.  Long-term financial goals can include saving for retirement, portfolio growth, education savings and more.  Short-term goals often include debt relief, creating an emergency savings account, and purchasing a car.  What does success mean to you?  Define your version of success to begin moving toward it.

2. Calculate Net Worth

Find out where the money is coming from, and see where it is going.  Calculating net worth involves a number of factors. The basic mathematical equation for calculating net worth is to add what you own (assets) and subtract from that what you owe (liabilities). To calculate assets, start big and work in. Begin with large and long-term investments, tallying investments of diminishing scale from there. Subtract debts and other financial obligations to find net worth. With an account of personal net worth, aim to grow it.

3. Develop Intelligent Strategies

With realistic goals established, create intelligent strategies for managing them.  An intelligent strategy takes into account more than a goal and a means for achievement.  An intelligent strategy considers potential market shifts, personal challenges, and more.  Strategies taking the most into account have the greatest flexibility.  Be thorough and create additional strategies to accommodate unexpected changes.

4. Get Insured

With an end goal in mind, reduce the chances for interruption with adequate insurance protection.  The best-laid financial plan can be derailed by the unexpected.  This can include term- and whole-life insurance, disability insurance and more.  The right insurance will vary by individual.  Age, marital status, annual earnings and more will help determine the right levels of protection. Layers of insurance protection may help keep financial goals on track.

5. Take Action

Having calculated net worth, determined goals, outlined strategies for pursuing them and prepared for the unexpected, it is time to act.   A strategy can only yield results when put into motion.  Maintaining realistic expectations will help with responding to shifts in life and the market.  Expect to review a financial plan often.  Family growth, the purchase of a new home, and other life changes may call for changes to a financial plan.  A shift in the market may call for adjustments to a financial plan.  Those prepared and expecting to respond are better able to.

6. Get Advice

The challenges of creating a financial plan are going to be different for each person.  Talk to a financial advisor for help in creating a financial plan that works.  A financial advisor can help with:

  • Financial planning and advice for those ready to get a grasp on their finances yet need guidance.
  • Responding to unexpected income increases and other changes in wealth.
  • Money management and advice for those with limited time for personal finances.
  • Specialized guidance on money matters.
  • Advice on potential market changes affecting goals.
  • Evaluating financial plans to get the most from investments.
  • A professional opinion about financial goals, decisions, and more.

Find the path to your success and start striving towards financial goals today.  A financial advisor can help with all stages of a financial plan from evaluation, creation, implementation, and more.  It’s time to create the future you want.  Contact ProsperiFi at 847-292-4475 to create a personal financial plan today.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.