Personal Financial Planning: 3 Step Plan To Success (2023)
Click Here to Select Your Login

Personal Financial Planning: 3 Steps To Build Your Perfect Plan (2022 Update)

By
Updated January 25, 2022

Heather Jordan CFP®, MBA, Managing Director

How to create a plan and stick to it for a stable financial future.

Proper personal financial planning is the bedrock for financial stability and achieving your goals. It can be hard to know where to start, but regardless of age, it’s essential that you develop and adhere to a personal financial plan.

You can develop a plan on your own, but it’s helpful to reach out to a financial professional, like the ones at Trust Point, for guidance. Remember, we’re here to help. 

Woman checking bills on the carpet of living room; personal financial planning

What is personal financial planning?

You may have heard a lot of talk about developing a financial plan but are unsure what it entails, exactly. Here’s a primer.

A personal financial plan involves developing a long-term management strategy for your finances that takes into account your current needs and future goals. Doing this can eliminate stress, support your current financial standing, and allow for a worry-free retirement.

While everyone’s financial needs and considerations vary, a financial plan is important for everyone to have in place.

3 Steps to build a financial plan

1. Set goals and gather data

Outline any financial goals you have, both short-term and long-term. Are you planning on saving for college, buying a house, or preparing for retirement? All of these are factors to consider in your plan.

Take a look at the resources you currently have available to you, whether it’s your income, your social security, your pension, or your investments. See how they align with and impact your financial status. Are there any risks? How do these potential risks align with your goals? Defining your goals will help kickstart the rest of your financial plan.

2. Tackle your immediate needs

Start by factoring in your current living expenses and making a budget accordingly. Doing this will show how much you’re spending and where you’re spending it. Include consistent monthly expenses, as well as rare or leisurely expenses. Ask yourself if your income or current cash flow covers these areas.

Be sure to address any lingering debt that you have as well. Try to avoid accumulating high-interest debt as much as you can. Do your best to pay down as much debt as possible and decide which areas of debt you can work on decreasing first.

3. Plan for the future

In order to have a reliable retirement plan or child’s college fund, the money has to be there. Plan to budget out increments of money to place into separate funds over time. A good starting place is doing so for five to 10 years before it’s needed.

Be aware of 401(k) or similar plans, IRA contributions, and college savings plans available to you. Investing in these areas and utilizing these resources is a surefire way to guarantee accessible money when needs arise in the future.

Not every need will be accounted for in your financial plan. Your lifestyle or circumstances may change over time. You can do your best to be ready for this by creating an emergency fund for unforeseen expenses.

mutual funds vs annuities; personal financial planning

What tools are available to me?

If you do choose to create a financial plan on your own, there are a variety of tools to help you manage different aspects of the process. Budgeting software can help you manage your current and future expenses. Online investment portfolios allow you to view market changes in real-time.

Get Help From Our Experienced Team!

But remember, you don’t have to go through it alone. Our experienced team is ready to help out with any aspect of the planning process and can help give you peace of mind that your financial future is secure. 

We are here to help!  We are passionate about educating our clients so that they fully understand your options and can make the best decisions for your financial future. Your success is at the heart of everything we do. We believe that by doing what is best for you, we will be doing what is best for our company.  Learn more about how we can help by visiting our Who We Help page.

Ready to get your financial plans started? Give us a call at 800-658-9474.

Share This Post

Heather Jordan CFP®, MBA, Managing Director