Financial Plan

Six steps to a financial plan

1. What is your goal?
2. What is your starting point?
3. What is your financial score?
4. What is your financial capacity?
5. How realistic is your time horizon?
6. Formalize and implement your financial plan!

Six Steps §

• Set a Goal
  • Think about the goal from the framework of SMART goals. Specific, Measurable, Attainable, Realistic, and Timely
  • “To save $50,000in5yearsforthedownpaymentona$250,000 house”
• Know starting point
  • Take an inventory of your human and financial capital and personal attributes and attitudes
• Financial Score
  • A financial score provides a realistic understanding of your risk tolerance, financial knowledge, and feelings of control
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• Financial Capacity
  • The ability to keep moving forward toward goal achievement even if you face a few financial challenges or emergencies along the way
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• Time Horizon
  • Determine if the time horizon is realistic
  • The success or failure of a financial plan comes down to one thing, balancing risk and return in savings and investments
  • Time value of money calculations come in handy
• Implement
  • Without proper implementation you’ll find it difficult to achieve your financial goals
  • The success of any journey begins with thorough planning