The Planning Process

The Financial Planning Process is a method used to construct, implement, and monitor a plan designed to enable a person to accomplish his or her financial goals.

Take Inventory After you have defined your goals and life mission, you can create financial objectives that will help you accomplish your mission. Taking inventory of your financial resources is one of the first steps in developing a financial plan. This process involves listing all assets, liabilities, sources of income, and other pertinent financial items. Preliminary worksheets can be downloaded here. Return to top

Analyze and Evaluate Once you gather the appropriate information, you are ready to analyze and evaluate your situation to determine your course of action. Often it is helpful to use financial planning software to make these evaluations. A professional financial advisor will have the necessary tools. Also, planning tools are available via the Internet. One of the better known sites is www.financialengines.com.

Design a Plan After you identify and evaluate your current financial position, you can design a plan to help you achieve your objectives and goals. If you are working with a professional planner, he will design a plan for you that normally includes a number of specific recommendations. Many times you will need an attorney to draft documents that will be foundational to your plan. Return to top

Implement Plan Now you are ready to implement your plan. Implementation can involve a variety of things depending on the scope and complexity of your financial plan. You could need to reposition assets. You might implement certain charitable giving strategies. You might create trusts or even a foundation to accomplish your goals. In the end, all documents, services, and products used need to be consistent with the objectives and goals of your overall plan. Professional financial advisors will often have a network of other professionals including attorneys and accountants who can help you implement your plan.

Ongoing monitoring and maintenance The reality of life is that things change. Things that are important to you today might not be a priority later in life. The investments that you own will either perform better or worse than you expected. You will need to monitor your investments regularly and make adjustments when necessary.

Resources:

Websites:
www.mastersadvisors.com
www.financialengines.com

Books:

About 50 books by Larry Burkett
Sound Mind Investing Austin Pryor
The Family Financial Workbook Larry Burkett

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