Achieve Goals and Peace of Mind Through Financial Planning

Think about having an exam at your doctor’s office. The doc comes in, examines your numbers, checks for problem areas and dispenses prescriptions you may need to be your healthiest and strongest now and in the future.

Financial planning is similar! It’s a comprehensive evaluation of your financial health to assess what’s working and what might do better — such as credit card and student loan debt — so you can achieve your most robust and secure present and future. It also puts protections in place for you and your family through emergency savings, insurance coverage, estate planning and more.

Why is Financial Planning Important?

Financial planning is for and about you and what matters most to you. It’s about identifying your dreams and goals and putting a plan in place to achieve them. When you have control of your finances, you get to make deliberate, positive choices about what your future looks like. Should you put more money into retirement, savings or toward college expenses? The choices are yours to make!

How Do I Work On My Plan?

Advance your financial planning with some self-examination. Picture your future self. What do you want your life to look like five, 10 and 20 years from now? What do you care most about? How would you most like to spend your time? Once you know what you want, you can set about making it a reality.

Take a look at these financial planning building blocks and begin or continue putting yours in place:

• Financial goals: Your personal goals will shape your financial plan. Defining your priorities allows you to come up with a financial plan for how you’ll achieve them. Your list may include paying for college, buying a house or retiring early.
• Net worth: Calculate yours by adding up all of your assets — what you own — and subtracting your liabilities, or what you owe.
• Spending plan: You’ll track and review all money you bring in and all money you spend and owe. Knowing what’s coming in and what’s going out allows you to make a plan for paying off debt, saving and investing. Try these tips from the Bureau of Consumer Financial Protection for managing your spending.
• Retirement plan: This involves calculating the amount of money you’ll need to meet your financial needs and wants in retirement, deciding how you’ll reach your goal amount and how you’ll tap into it when the time comes.
• Risk management review: Even the best plans can go awry, so assess your life, disability, personal liability, property, casualty and catastrophic insurance coverage and your emergency savings fund. Make sure you and your loved ones have enough coverage in case something happens to you, your home, vehicles or other property.
• Estate planning: It’s vital that you make your wishes known by completing key documents and making sure they remain up to date. Set up an appointment with an attorney at your installation’s legal assistance office to begin or update your estate plan. Documents include:

° A will, which expresses your wishes for distribution of your property upon your death, dictates guardianship of your underage children and more

° A power of attorney for property or health care, which gives someone legal authority to act on your behalf

° A living will, also known as an advanced medical directive, which gives you a voice in medical situations when you’re unable to make your wishes known

° Trusts, which can help you manage or protect assets, provide additional guidance on caring for your children or tax planning, and help bypass the expense and delay of probate court

What Resources Can I Tap?

• You have accredited Personal Financial Managers and Counselors at your fingertips. Set up a no-cost appointment at your nearest Family Center to learn more about setting long-term financial goals and making them a reality.
• Take advantage of all the free financial planning tools, including a Retirement Ballpark Estimator, Compound Interest Calculator, and Savings Goal Calculator, available to you at Investor.gov.
• Learn more about your current financial well-being and get tips for making improvements by taking the Bureau of Consumer Financial Protection’s quick 10-question evaluation.
• Service members receive financial training at regular intervals. The Road to Financial Readiness maps out the timeline.

Work on your plan today — your future self will thank the present you!

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