By Sheryl Rowling
SAN DIEGO — Before I begin, I must start with a disclaimer: I think everyone should have a comprehensive financial plan. After all, if you don’t have a coordinated plan to reach your goals, how will you get there? A comprehensive financial plan is appropriate at any stage of life. It is not meant to be a one-time only endeavor. Since life and goals change, your financial plan must change also.
A comprehensive financial plan will guide you on all aspects of your financial life, including, at a minimum:
- Cash Flow
- Investments
- Tax Planning
- Insurance
- Retirement Planning
- College Funding
- Estate Planning (or Wills)
If you engage a fee-only advisor (one who doesn’t sell anything or get commissions), you can ensure unbiased advice.
Okay, I let myself get off track. The title of this article is “All You Need To Know About Financial Planning.” If you are not ready to begin the comprehensive financial planning process, there is one basic rule: Live beneath your means.
This translates into spending less than what you earn. By doing so, you will be able to save for emergencies and the future. Living beyond your means results in accumulating debt – sometimes the worst debt of all: high interest credit card balances. Living within your means is better than living beyond your means, but you won’t have money for emergencies nor will you be saving for long-term investments (like a down payment on a home) or retirement.
If you do nothing else than live beneath your means, you will be on your way to establishing financial security.
After that, make sure you have safety nets in place with health, auto and disability insurance and, at least, a will. Then, when you are ready to tackle a comprehensive financial plan, you’ll be looking at fine tuning not playing catch-up!
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Rowling is a certified public accountant, personal finance specialist, and principal of Rowling & Associates. She may be contacted via sheryl.rowling@sdjewishworld.com