Do You Have a Personal Financial Plan?

In today’s economy it is more important than ever to have a personal financial plan and manage your money. Having a financial plan that fits your financial life style can help you obtain the direction you want and help you manage your finances and achieve your financial goals in life. With America’s national debt growing out of control it is time to take a look at what we can do as Americans to change the way we live financially. Do you currently have a personal financial plan or are you in debt?The first thing to do is get a personal financial plan together for achieving your goals financially. Where do you want to be financially for the short term and the long term? Look at your financial position, adequate protection, tax planning, investment goals, investments and estate. Once you have your goals in place, then you must come up with a plan. The plan should consist of goals and should be realistic in regards to what you want to achieve with your financial goals. So where do you start?Find out what your debt to income ratio is. One of the main reasons why people go into debt is because they live above their means and don’t pay attention to how much they are spending. Spending money is a behavior. Most people in America have been raised and taught to go to college and that college will provide you the lifestyle you want. This is not necessarily true. If you go to college and graduate, then you have to find a job that can pay for the loans and everything else you desire. People are consumed and concerned mostly with having a social status in their community that makes them feel important and superior or secure about what people or friends think of them. However, most people don’t consider the fact that buying the fancy car, home, or obtaining loans and paying for education has to be paid back in time. Controlling your behavior towards money can be accomplished by managing a personal financial plan.Having a personal financial plan will allow you an over view of what you can afford. It will allow you to analyze your wants versus your needs. The plan, regardless of your income or debt you have accumulated also provides a way for you to see how to avoid major financial mistakes in the future. The personal financial plan will consist of managing your risks and help you retire at a much earlier age and also help you make decisions about where your money will go when you are deceased. If you have not started a plan then it would be wise to start one now so you can live a comfortable lifestyle now and later on in life.

Financial Planning Helps You Feel In Control of Your Financial Future

Some of my friends need to hire a professional to help them design a financial plan, but some of them can get far down the road with a little time, a little diligence, and a trusted friend who can help because he or she has already gone down that road.Here are some tips I give my friends to help them figure out if their financial planner has mixed agendas:- Is he wearing lots of diamonds and Bruno Magli shoes?- Is she driving a $90,000 car, but you caught her talking about having a hard time paying her credit card bill?- Does he charge a fee, or is he paid by commissions from sales?- Does she appeal to your selfish side, focusing on the indulgence you can enjoy if you have a lot of money, or does she ask about what matters most to you?- Does his offer seem to be prepackaged, one-size-fits-all?- Does she use any pressure to get you to buy a product?- Is he as slick and the proverbial used car salesman, always smiling and promising, glossing over details and moving in for the check?According to Certified Financial Planner Board of Standards Inc. (CFP Board) research, more than 40 percent of Americans do not feel in control of their finances. If this sounds familiar, a professional financial planner might be able to help. Knowing what to expect as a client and what constitutes a healthy and productive financial planning relationship will put you in the driver’s seat when it comes to taking control of your financial future.Working with a qualified adviser can be a financially valuable and emotionally rewarding experience. Trust between you and your financial planner is one of the key ingredients in a successful financial planning relationship.To find a professional you can trust, ask friends to tell you about the professionals they use, and look for someone who is genuinely interested in his or her clients’ goals. Interview two or three before you decide. (You may find that a friend’s perception of his professional is very different than yours!) Don’t settle on someone until and unless you’re convinced he or she values what matters most to you, doesn’t use slick presentations, and doesn’t over-promise. Remember that the professional’s role is to give you advice and assistance, but you retain responsibility and control of your decisions. Don’t invest in anything unless you clearly understand the risks and potential rewards. In other words, every time you commit resources, the investment and risk has to make sense. You can try a professional for a while, but you aren’t married to this person. If, at some point, you don’t feel that your visions for your financial future are compatible, or if the professional seems to forget what matters most to you, find someone else.Here are some of your basic rights that as a financial planning client: Before engaging you as a client, your financial planner should discuss your goals and objectives with you and explain what you can expect from the relationship.Your planner should explain all risks associated with his or her financial recommendations and identify any potential conflicts of interest.Your needs should be the focal point of all recommendations made by your financial planner.Your planner should demonstrate the knowledge required to offer financial planning advice, such as attainment of the Certified Financial Planner™ certification.A planner should never divulge your personal and financial information to anyone. Some acceptable exceptions are: sharing it with other professionals to conduct business on your behalf, at your consent, or when mandated by court opinion or law.Your planner should not provide investment advice or stock brokerage services without the proper license to do so as required by state and federal law.Use the following checklist to evaluate your existing financial planning relationship. If you are not satisfied with the services you are receiving, assert your rights by discussing your concerns with your planner. A competent, ethical planner will seek to understand and meet your needs and will explain the reasons behind his or her decisions and actions.Items to look for:My planner is diligent in carrying out his or her activities.
My planner responds to my phone calls and requests promptly.
Recommendations are appropriate for my situation.
I understand what I’m being charged and why.
I understand and accept my planner’s conflicts of interest.
My interests drive the decisions being made.
I’m involved in decisions at the appropriate time.
I do not feel pressured to make certain decisions.
I receive adequate information to make good decisions.
My planner investigates the products he or she recommends.
I get the service or products I paid for.
My planner presents his or her qualifications or abilities honestly.
My financial planner’s staff is properly supervised.
My information is kept confidential.Trust is the most important ingredient in any relationship. If you’ve found someone who can help you chart the course for your financial future, treasure that person. If you haven’t looked for that person, start looking. If you’ve looked but haven’t found someone you trust, keep looking. Don’t stop until you find someone who wants to help-with no hidden strings attached-and is genuinely concerned about what matters most to you.For more information about financial planning, visit CFP Board’s Web site at http://www.CFP.net or call toll-free at 800-487-1497 to request a FREE Financial Planning Resource Kit.Copyright © 2009, Certified Financial Planner Board of Standards Inc. All rights reserved.