Creating a Financial Plan—How to Prepare
Only 30 percent of Americans have a long-term financial plan, however, having a financial plan for you and your family is a great way to stay on the path to meeting your financial goals. By reviewing your financial situation with an advisor and putting down your goals on paper, you will have a clear path on how to move forward.
If you don’t have a financial plan in place, don’t worry. No matter what your situation is, an advisor can help you gather and review all of the necessary information to create realistic financial goals and a plan to achieve them.
Before meeting with an advisor to create your plan, you’ll need to have some documents in order and a good understanding of your living expenses. Here are some items an advisor may ask you for to create a holistic financial plan:
- An overview of your monthly living expenses—this should include utilities, groceries, shopping, gym memberships, pet costs, out-of-pocket healthcare expenses, home improvement and maintenance costs, insurance costs, entertainment, travel and self-care. We recommend using this helpful expense worksheet to easily organize your monthly expenses.
- Documents to show your income—two of your most recent paystubs is a great start. This may also include rental property income or pensions. Also include any Social Security income you currently receive or an estimate of your future Social Security retirement benefit. Everyone can view their Social Security retirement estimates and benefits by visiting the Social Security website here.
- Recent bank statements
- Retirement account statements
- Investment account statements
- Mortgage statements
- Statements and interest rates on any loans or debts—this may include student loans, car loans and credit card payments.
- An overview of your employer benefits—this includes life insurance coverage, any short- or long-term disability coverage, healthcare benefits and retirement account benefits.
- An overview of any additional insurance benefits, including long-term care insurance, life insurance, and property insurance.
- Estate planning documents
- Most recent tax returns
This may seem like a long list but it’s important for your advisor to have the whole picture of your finances to prepare an accurate plan for you. You may feel hesitant to share so much personal information with your advisor but it’s best to be as open as you can. Your advisor is here to help and has your goals in mind. The more honest you are during the planning process, the more accurate your plan will be to help you achieve your goals.
This material is provided for informational purposes only. It does not constitute legal, tax, accounting, or other professional advice. It is subject to change without notice. Information contained herein from third-parties was obtained from sources considered to be reliable. However, its accuracy, completeness, or reliability is not guaranteed. Linkage to any third-party content is for informational purposes only and in no way implies an endorsement or affiliation of any kind with any third-party. FNBO bears no responsibility for any third-party sites or content. This material was created as of the date indicated and reflects the author’s views as of such date. Neither the publisher nor any other party assumes liability for any loss or damage due to reliance on this material.