Jump-Start Your Financial Plan For 2019!

If you are like most, you’ve set some new goals you’d like to achieve in 2019. Have you set out to improve your physical health by fine-tuning your diet or adding a new exercise routine? Are you working toward improving your emotional well-being and strengthening the significant relationships in your life? Is your primary focus set on taking your career to the next level this year? These are all very beneficial goals, however, there is one key goal which many overlook, and we would like to remind you about it: setting up your financial plan. 

We can pretty much all agree that having a financial plan is a cornerstone of financial success. Yet for one reason or another, for most it’s one of those things we know we should do but keep putting off. So why not make 2019 the year you finally take care of this key aspect of your financial security? After all, a solid plan is the vital first step toward achieving any goal. So, naturally, this includes your financial goals. Here’s how you can get started.

1. Create Your Budget

This seems elementary, however, it is such common sense that it is often overlooked by many. The foundation of any financial plan is knowing exactly how much you earn, how much you spend, and what you spend it on. So your first step is to record everything you spend for at least three months (the longer, the better). This can be done by carrying around a small notebook, entering your expenses into a budgeting app on your phone, or automating the process with a service like Mint. You can even check with your bank to see if their app has one of these tools built in. At the end of three months, calculate your average monthly spending for various categories (food, entertainment, utilities, clothes, gas, recurring bills, etc.). If you’ve never done this before, I bet the results will surprise you!

2. Set Financial Goals

Now that you have a clearer picture of where you are now, it’s time to define where you want to be in the future. When would you like to retire? At what level of luxury are you planning to live? How much will you need in your retirement account to afford this quality of life? And while retirement is a big part of financial planning, it is important to include all of both your short-term goals and long-term goals. Do you want to move into a new lake house in 10 years? Pay for your children’s education? Donate to charities? Write it all down and make sure your plan is set to help you achieve all your goals.

3. Design A Savings Road Map

Once you’ve defined where you are now and where you’d like to be, it’s time to make a plan to bridge the gap. Assuming an average income and return on your investments, how much do you need to put away each month to reach your goals on time? Does your budget allow for this? If not, what steps can you take to either reduce your monthly spending or increase your monthly income?

4. Put Together Your Portfolio

Unfortunately, stockpiling your savings under your mattress won’t get you very far. The key to achieving your financial goals is creating an investment portfolio strategically diversified to meet your personal needs. The earlier you get this started, the more you’ll benefit from the exponential power of compound interest.

5. Define Your Exit Plan

The last part of your plan is creating exit strategies for each goal. You need to be able to access your money when you need it. If you skip this step and just dump all your savings into retirement accounts, you’ll be in for an unpleasant tax surprise when you want to pay for the aforementioned lake house or college education. So keep in mind when you’ll need to access your money and how to set up your portfolio accordingly.

6. Schedule Check-Ins

Once you’ve set up your plan, you’re well on your way, but your work’s still not quite finished. Just as important is taking the time to periodically maintain. You’re bound to experience many life changes between now and retirement, and you must adjust your plan accordingly. Check-ins are easily brushed off and forgotten, so it’s best to schedule them into your calendar. As a simple rule of thumb, we suggest you aim to review your progress every six months or whenever your life situation changes (income change, change in expenses, change in goals, etc.).

Next Steps

After reading these steps, hopefully it is now clear that getting your financial plan in place is simpler than you may have thought. But the truth is, while a tried-and-true process can make it simple, it does not necessarily mean it’s easy. One can quickly find themselves hung up on the details and become quite overwhelmed. Fortunately, here at Roberts CPA Group and Lifetime Wealth Design, we are professionals who are ready to help you through every step! We are experts in designing personalized financial road maps to help people achieve their goals. If you’d like to learn more about how we can help you set up your financial plan, you can schedule your complimentary consultation call or meeting by sending me an email at [email protected] or calling my office at (502) 426-0000. Or, if you prefer, you can easily click here to schedule an appointmentusing my online scheduling system.

About Kevin

Kevin Roberts is a CPA and CFP? specializing in providing virtual CFO services to individuals, families, small businesses, and professionals in the medical, professional service, and restaurant industries. He has more than 20 years of experience in accounting and taxes, and more than seven years in the financial services industry. Regardless of the services he provides, Kevin strives to offer clients confidence knowing that their financial aspects are being addressed and monitored by professional and competent individuals. Based in Louisville, he works with individuals, families, and businesses throughout Kentucky. Learn more by connecting with Kevin on LinkedIn or emailing [email protected].