How to create a financial Plan - from a fee only planner

As a consumer you basically have two choices you can either hire a financial planner and I certainly suggest you look for a "Certified Financial Planner" who works strictly on a fee only basis or do it yourself with the aid of reasonably priced software.

Key to your success will be the thought process and then writing it down to specific details as to your goals, objectives and data which will highlight your current financial situation as well as projected financial data over a period of years.

Take note that your success will depend on actually implementation of your plan in other words taking action.

Over the years I've created numerous financial plans for clients that just sat on a shelf collecting dust. You must also update and modify your financial plan as your situation changes and at least every other year otherwise it will become outdated. You need to adjust inflation assumptions and investment return projections.

Your financial plan will only be as good as the data you enter so be as specific and detailed as you possibly can. I strongly suggest you keep a daily budget for at least six months so you may update your budget data as needed. . Experience has taught me that most people are clueless on how much that spend on a monthly basis on the month to month expenditures such as food, entertainment, dining out, gifts, etc.

What information is needed:

1.List all your assets and their values
2.List all your liabilities and current balances - separate by long term and short term (short is year or less)
3.List assets and liabilities by ownership - by spouse and jointly owned
4.Create a monthly budget
5.List your insurance coverage including life insurance (face value) if any
6.List all your investment assets - separate retirement such as IRA, Roths and 401k from regular accounts.
7.Collect the last three years of tax returns
8.For estate planning purposes you will need copies of any Wills, Trust agreements, living wills, etc.

Remember your output will only be as good as your input so try to be as detailed an accurate as you possibly can. It is a good idea when setting up your budget to keep a written log on your monthly expenses.

Setup an assumption matrix showing what values you plan to use such as return on your investments, inflation, growth on your assets such as your home and so on.

Gather all this information and you are now ready to begin the process either with the assistance from a financial planner or you can do this own your own with the help of financial software.

For further information visit : fee only financial planner

Daniel Iuculano, CFP

Good luck.