Financial Planning - Goal Setting Guide

Financial Planning - Goal Setting Guide
By []Gary A Lewis

More often than not, Financial Planning clients need help in defining their goals. Here is a list of questions designed to think about your personal financial planning objectives.

Cash Flow:

1. Do you have a budget that you follow regularly?
2. Do you spend all of the money that you earn?
3. Do you save money regularly? How much? How often?
4. Do you have a savings account that you use only for emergencies?
5. Do you want to improve your standard of living?
6. Do you use credit cards? Do you have credit problems?

Think about these questions and then determine if you need to set Cash Flow Goals.

Possible Cash Flow Goals:

We recommend that you have an Emergency Reserve Fund of at least three months of your regular expenses? Do you have a cash reserve?

Are you saving for future major purchases? Special vacation, second home, college for your children, wedding expenses for your children, gifts to relatives? Have you started saving for these goals? Do you know how to start?

How are your investments positioned? Do you have too much cash? Do you know how to invest? Do you know what rates of return you are receiving on your savings or investments? Do you need help in this area?

Protection Needs:

1. Do you have adequate health insurance?
2. Do you have salary continuance in case you become disabled?
3. Who will care for you if you become disabled or mentally incompetent?
4. Do you have legal documents in place that will appoint someone to handle your affairs in the event you somehow become incapacitated?
5. Have you appointed a guardian for your children should something happen to you and yoru spouse?
6. Do you have adequate life insurance to take care of the needs of your survivors should you die prematurely?

Protection Needs involve insurance and legal advice. Do you have othe advisors who you have worked with in addressing the above issues?

Possible Protection Needs Goals:

Review my health, disability, long term care and life insurance policies to understand what I currently have and what options are available. As mortality tables have recently changed, some insurance premiums have gone down. You might be able to save money by switching policies.

Understand disability insurance. Insist on owning "own occupation" insurance as social security and other forms of disability my not pay out as you expect.

Review my estate planning documents. Be sure that my Will, Living Will, Power of Attorney, Health Care Proxy and other important documents reflect my wishes. Be sure to have contingent agents for your powers of attorney. If you are a parent of minor children, be sure to address guardianship issues.

Retirement Planning:

1. When do you expect to retire?
2. How long do you expect to live? What age will be be?
3. How much money will you need to have when you retire?
4. Are you worried that you may outlive your savings?
5. Are you actively saving now for your retirement?
6. Do you know how to start?

Briefly describe how you envision your retirement. What are you going to need to achieve financial independence?

Reviewing and thinking about these questions will help you no matter if you hire a professional to do your comprehensive financial plan or you want to do it yourself. While comprehensive financial plans can cost anywhere from $1,000 to $20,000 if done by professionals, you can find help in developing your own plan at []Free Financial Planning Advice.

Gary Lewis' ideas incorporate more than 30 years working with investments including 20 years experience in the derivatives industry and 10 years as a fee-only comprehensive financial planner. He specializes in designing portfolios that meet the client's required rate of return with a minimum level of volatility.

Gary holds the CFP® and ChFC designations and earned a Master of Management (MM) degree in finance from Northwestern University. He currently resides in Mexico City.

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