Top 10 Financial Planning Checklist

This Financial Planning Top 10 list covers some of the most common issues I see and things that I view as most important.
 
1) Make a commitment to getting your finances in order
Your money and finances are important. Devote some time and energy to get organized and know where you stand. Knowledge provides choices and more opportunities. Make it a priority in your life now.  I know it is easy to put off but then years slip by all too quickly.
 
2) Set financial goals so that you can do what you want
Where are you now? What do you want? What is the plan to get you where you want to be?
 
3) Track how you are spending your money or stay on track for your savings goals
They key to financial freedom is living within your means. Do you know how much money you spend and where your money is going? Are you spending money on things you value and enjoy? Many people do not know where their money goes and waste it on unimportant things.
 
4) Set up automatic savings and / or create a plan to pay off credit card debt(s)
Create the habit of paying yourself first and saving some money every month, even if it is $10. If you have credit card debt, you want to have a plan to get out of debt as quickly as possible. Once you are out of debt, start saving your money. This relates to living within your means and having excess cash flow to invest for the long term.
 
5) Create a cash cushion of 3-6 months of living expenses or have a home equity line of credit
This cash or home equity line of credit provides a cushion for when emergencies happen or unexpected expenses come up. Then, you do not need to liquidate securities at the wrong time nor borrow at high interest rates. Unexpected things do happen. The cash cushion allows you to better handle the unexpected.
 
6) Get excess liability insurance and/or confirm the coverage limits
Your investments and savings can all be lost if you are not properly protected. An excess liability (also called umbrella) insurance policy is relatively inexpensive and provides additional coverage on top of your homeowners and auto insurance policies. Accidents happen and you want to have the coverage to protect you and your family in this litigious society. You want $1 million in excess liability coverage or have it approximately match your net worth, if that is higher than $1 million.
 
7) Obtain or confirm that you have the needed long term disability and life insurance for you and your spouse
You need to prepare for the worst. Hopefully you will not need it, but if you do, you will be so thankful that you do.
 
8) Implement and review Estate Planning Documents yearly (Wills, Durable Power of Attorney, and Durable Power of Attorney for Health Care)
If you have children, you NEED to have a Will that states your guardianship wishes! Clearly stating what you want while you are living is the only chance you have to make sure those left behind know what you desired and what was important to you. Relationships, situations, and priorities change so you need to review and update your documents so they stay current with what you want.
 
9) Confirm named beneficiary designations on your life insurance and retirement accounts
Named beneficiaries provide more flexibility in Estate Planning and stretching out IRA required minimum distributions. Pay special attention to contingent beneficiary designations as these can provide significant flexibility for disclaiming in the future.
 
10) Decide on an asset allocation and investment plan. Invest and have your accounts re-balanced regularly
Your asset allocation is the most important factor in determining your future returns. Know what you are paying in investment fees and confirm that you are comfortable and staying “on plan.”
 
If you have any questions or would like help on how you go about accomplishing any of the items on this checklist, please give me a call.
 
I strongly believe you should have the peace of mind to know that you are on track to accomplishing your life and financial goals. Take the first step by developing a plan.