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This personal financial planning sample, by Ron Redfield, CPA, PFS, guides you through the steps of personal financial planning. Samples—such as this—are great personal financial planning tools, indeed.
Full Article - Table of Contents
Question by Steve Kobrin: Ron, my father has always preached the virtue of goal-setting, namely "plan your work, and work your plan." Tell us how this relates to personal finance. How important is it to use a personal financial planning sample, as a guide to personal financial planning, in general—in terms of personal goals for saving money—such as for retirement planning, for example?
Answer by Ron Redfield (continued):
A personal financial planning sample can be very useful, indeed, as a template for your own personal finance plan. Remember, we've established that goal-setting should not intimidate you—no matter if your focus should be on saving money or on retirement planning. Using a sample financial plan helps ease any pressure.
Try using the following sample financial plan, as a basis for your own personal financial planning:
I am 43 years old.
My wife is 38 years old.
I have 3 children, ages 5,8 and 10.
My goal is to send the 3 kids to college. My goal is to one day have a vacation home, yet not a requirement. My goal is to... (and so on).
My assets are currently worth $X.
My Net Worth is $X.
My annual income is $X.
My annual expenses are $X.
I expect to earn between 6 to 10 % over the long term on my investments. I project inflation to be X%. I have equity in my house of $X and my mortgage is planned to be paid off in 2016. I send 10% of my income upon receipt to an investment account. I participate in my 401K.
I have $X life insurance on myself, and $X life insurance on my wife. I have taken into consideration that my devotion to my job and, perhaps, my income level would drop if I unfortunately lost my spouse. And that is how I have determined the amount of life insurance that my spouse should have and visa versa.
This personal financial planning sample can be expanded—with spreadsheets, allocation schedules, budgets and so forth. Remember, your own personal financial planning will be as simple (or as complicated) as your financial desires.
As this financial planning article comes to a close, I would like to wish you much success with your very own personal financial planning. As always, please let me know if I can be of assistance.
Ronald R. Redfield, CPA, PFS, is available for a free consultation and sample portfolio based on your investment risk tolerance levels. And you're warmly invited to request a complementary copy of Ron's text on investment philosophy.
Please contact Ron by visiting him at Redfield, Blonsky & Co., sending him an email, or calling him at 1 (908) 276-7226. Be sure and read Ron's latest commentary on financial investments, to keep up with market changes.