Monthly Financial Planning
In thinking about Monthly Financial Planning, let’s first review. Remember that there are six key areas.
The six areas of financial planning are:
- Cash Flow Planning / Cash Management
- Risk Management
- Investment Planning
- Tax Planning
- Longer Range / Retirement Planning
- Estate Planning
Here’s what Monthly Financial Planning Looks Like
If you have more money coming in than going out, you have a positive cash flow (Cash Flow Planning). And it’s worth something and, therefore, a very valuable asset that needs to be protected (Risk Planning). When you’re making money, you will be paying taxes (Tax Planning). And if you have money left over after paying your taxes, you will have money for savings and investment (Investment Planning).
With a positive, protected cash flow, after paying your taxes, and putting enough money aside for your savings and investment needs, you can start thinking about future plans such as retirement, another home, or children’s education (Future Planning). Some practicing professionals call this retirement planning, but it’s really much more than that.
Lastly, if you’ve done a good job in these five areas upon your death, you will have accumulated wealth— the remainder of which could be left to family, friends, or a good charitable cause (Estate Planning).
This is the total scope of personal financial planning. All of the components are important. However, on this website, you will find that we mostly deal only with the first two: Cash Flow Planning and Risk Management.
As you take steps toward financial stability, monthly financial planning is key to that stability. Other posts on this site can help you learn how to get started. We also offer a one hour class to get you going in the right direction. You can contact us or look at our class schedule to catch the next one we offer.
