Personal Financial Planning

A financial plan is a comprehensive picture of your current finances, your financial goals and any strategies you've set to achieve those goals. Good financial planning should include details about your cash flow, savings, debt, investments, insurance and any other elements of your financial life.

The financial planning process is a logical, six-step procedure:

(1) determining your current financial situation
(2) developing financial goals
(3) identifying alternative courses of action
(4) evaluating alternatives
(5) creating and implementing a financial action plan 
(6) reevaluating and revising the plan

It seems to me that this approach is pretty straight forward...  and yet, 80-90% of Americans when questioned make the claim that they do not do any financial planning nor do they plan to do any financial planning.

The more detailed that one's personal plan is, the better the plan is and the easier it is to make specific changes if the plan needs to be tweaked.

My personal financial plan included the following:

1. retirement goal monthly income
2. the amount of money I wanted to have saved by the time I retired
3. number of employers anticipated
4. amount of education I needed
5. if I would relocate to another State
6. States I would not live in
7. annual salary and anticipated raises
8. estimated taxes to be paid
9. number of spouses
10. number of children
11. money for children's college tuition
12. number of vehicles owned (new or used)
13. number of houses owned
14. developing annual, monthly budgets (vacations and holidays)
15. maintaining cash flow requirements
16. maintaining financial statements (Balance Sheet, Income Expense Statement, Net Worth)
17. life insurance (home, life, vehicles)
18. preventive maintenance on health
19. plan to eat healthy and exercise
20. savings and investments (rental property)

My Goals were:

• $500,000 to $1,000,000 in the bank
• Social Security  - $2,500
• Social Security (spouse)  -  $1,000 - $1,500
• No life insurance
• One Child - will pay for college
• Mutual Fund investments - no individual stocks
• Buy used cars when needed (1 year old, leased, low mileage)
• Willing to relocate to NC, TN, SC
• Salary range:  $30,000 to $50,000 annually
• Will have college degree maybe more
• Willing to pursue technical education
• East healthy and exercise - maintain ideal weight or a little more
• Stop smoking cigarettes, - drink minimal alcohol
• Buy home (no renting) - change houses when necessary
• Retired monthly income:  $3,000 - $5,000
• Always save money 
• Use Credit Cards but pay off debt at end of month
• Plan to pay off all debt