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Determining financial goals
is the basis of any personal
financial management plan.
You cannot design an effective
portfolio unless you tailor it to
your needs.
You should determine what your goals are and make sure they are realistic and attainable. Include
goals such as marriage, children,
education, homes, hobbies and
other leisure activities.
If you need help reaching your
financial goals, you can seek
advice from a CERTIFIED
FINANCIAL PLANNER™ (CFP)
practitioner. These individuals
will help coordinate and plan all
aspects of your financial situation
and will help you focus on
your specific needs and goals
before recommending a financial
plan.
Pay Yourself First
As you establish your financial
goals, remember the first rule
of an investment strategy.
Pay yourself first. CERTIFIED
FINANCIAL PLANNER™ practitioners
generally recommend
saving 10 percent to 15 percent of your
net income.
If you are unable to save
10 percent to 15 percent, make it a habit
to save what
you can. The sooner you start saving, the greater your savings potential will be.
Plan For The Unexpected
Your savings plan should
include an emergency fund
for unforeseen
medical emergencies or job loss.
CERTIFIED FINANCIAL PLANNER™
practitioners recommend an
emergency fund be the equivalent
of 3 to 6 months of basic
living expenses. That money
can help you get through a crisis
without draining your assets. An emergency fund
should be liquid — quick cash
without loss of value — and
placed in a safe investment
instrument.
You also need to consider protection
against catastrophic loss — property,
life and long-term disability insurance. Those
expenses need to be included in your savings plan.
Assessing Your Resources
To get a good picture of your
current financial situation, gather all the information related to your finances. Include personal
insurance policies, pension
plans, investments, income tax returns and
any other financial related statements.
One of your goals should be to reduce or eliminate your debt.
Stop charging unless you can pay your balances each month. Why?
It makes more sense to save and invest your money, rather than paying
high interest rates to venders.
Remember having positive cash flow gives
you the opportunity to take advantage
of the right investment at the right time.
Certified Financial Planner™ is a
certification mark owned by the
Certified Financial Planner Board
of Standards, Inc. This mark
is awarded to individuals who
successfully complete the CFP
Board’s initial and ongoing
certification requirements.
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Basic Money Management
Basic Money Management
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