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Financial Plan Sample

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The best way to understand what financial planning is all about is to review a financial plan sample. Select the provided financial plan sample link for an in-depth review of the financial planning process.

What Is Comprehensive Financial Planning?

Financial planning is the process of meeting your life goals through the proper management of your finances. Life goals can include buying a home, saving for your child’s education or planning for retirement.

The financial planning process consists of six steps that help you take a "big picture" look at where you are financially. Using these six steps, you can work out where you are now, what you may need in the future and what you must do to reach your goals.

The process involves gathering relevant financial information, setting life goals, examining your current financial status and coming up with a strategy or plan for how you can meet your goals given your current situation and future plans.   

Cash Flow Analysis

First step in comprehensive financial planning is ones cash flow analysis. Simply put, cash flow is the income and outgo (expenses) of ones monthly budget. Real success of cash flow isn’t so much on what you earn but what is left over each and every month. A good barometer to gauge your progress is a net worth statement. Listing all your assets and liabilities, subtracting your liabilities from your assets will calculate your net worth. Hopefully your net worth statement will be a positive rather than a negative number.

Insurance Needs Analysis

This area of comprehensive financial planning focuses on emergency funds, life insurance, health insurance, automobile insurance, homeowners insurance, liability insurance and finally disability insurance.

First area to consider is building an emergency fund, usually three to six months of gross income. How much to save should depend on ones income stability. The more unstable or unpredictable ones income resources are, the more needs to be set aside.

Life insurance is a necessity to protect against premature death. How much is determined by many factors including children, home ownership, outstanding debt and current financial resources. As your financial resources increases, the need for life insurance decreases over the years.

Automobile insurance, best to comparison shop every year or two. Keep in mind that as your car ages and value goes down the need for certain coverage is reduce. Higher deductibles can reduce monthly premiums, dropping collision damage coverage after car is paid off and value drops below a certain amount can also save you money.

Reviewing homeowners insurance is recommended as the value in your home increases. Review your limits so that you are adequately covered in case of a fire or loss of personal property.

When considering disability insurance remember statistic shows, you are more likely to become disabled than die prematurely. If your employer offers coverage, do look into it for long term protection.

Investments and Retirement  Planning

When discussing comprehensive financial planning. Investments and retirement go hands in hand. Number one rule is “pay yourself first”; no less than 10 % of monthly income should be regularly invested. Clearly define annually your goals and objectives as it relates to investments and retirement. If you don’t know where you are going, the chances of getting there is pretty slim.

Estate and Tax Planning

Don’t confuse tax planning with tax preparation, they are quite different. Tax planning is a year round process that involves taking steps today to minimize taxes in the future. Tax preparation is after-the-fact and little can be done to lower tax liability.

Estate planning involves federal and state taxes after someone dies. Important to consider are “Wills”, life insurance and tax saving trusts.

Education Planning

Comprehensive Financial Planning also looks at the education needs of a family.  Financial strategies to consider would be Education IRA’s, Savings bonds, mutual funds and education 529 plans offered by states.


How To Use Credit Wisely - Proper use of credit can be a strong ally or your worse enemy turning into a nightmare. Checking your credit history from the three credit agencies and getting your FICO score is essential for monitoring your credit and protecting your identity. Select above link for detailed information on monitoring and managing your credit. .