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A financial plan is a blueprint detailing your current money situation and long-term economic goals and objectives to pursuing those objectives. While some people create a financial plan alone, working with a financial advisor can help you create a more effective, realistic strategy.
Every person’s financial situation is unique, and the plan you create should match your individual goals and objectives. Here are a few steps you can take to begin the financial planning process.
Calculate net worth: You can determine your current net worth by examining your assets and your liabilities. Your assets anything of value, such as homes, cars, savings accounts, and retirement plans. Your liabilities include any debts, including credit cards, student loans, and mortgage loans.
Determine cash flow: You can’t have a handle on your financial situation without knowing how much money is coming in and going out every month. Calculate your monthly income and document every necessary expense, including debt payments, living expenses, and savings.
Consider your priorities: The most critical part of any financial plan is defining your financial goals. You may want to save for a home, start a business or start college savings accounts for your kids. Your financial advisor can assist you in saving for these goals, but it is up to you to define your priorities.
Financial planning can be an overwhelming process, and it can feel like you are not making any progress if you do not document your goals. Working with an experienced financial advisor can help you make intelligent decisions regarding your future. Contact Benchmark Financial today to set up a consultation.