October is Financial Planning Month

Taking a comprehensive look at your financial situation is something you should plan on yearly. The month of October as you are preparing to wind up the tax year and prepare for holiday expenses is a great time to sit down and make specific plans and goals for your financial life.

Getting Started

There are easy steps you can take to have a look at the big picture and see where you need to focus over the next few months.

1. Asses your income and budget

Look at your current financial situation. How much do you bring in and how much is being spent. What is being saved for a rainy day? Even if you are upside down every month and struggling, you are getting a view on paper of your financial situation. Make lists of your current expenses and don’t forget the little things like subscriptions, meals out and other discretionary costs. Every dollar ads up quickly!

You can use the forms provided by FFEF for budget and expenses at these links:

Personal Monthly Budget: English
Creditor Information: English
Monthly Expenses blank: English | Spanish
Net Worth calculator

2. Set some goals

Are there some areas where you can make some improvements to balance out your budget? Set some specific goals for yourself to cut back on purchases and get your savings on track. You can also set goals for future ‘bucket list’ items like a trip, new computer, or home ownership. Be sure to add a ‘why’ to each of your goals. It will help with your motivation.

3. Create a plan for the present – and the future

Your map of monthly income and expenses can help you see exactly where your money is going for fixed expenses and what your spending habits are for discretionary ones. Be honest with yourself about your lifestyle, values and goals. For instance you can budget $500 for food in a month… but realistically maybe that should be closer to $700. Where will that money come from? Be sure to add some fun into the mix, it will be easier to keep on track with your goals.

4. Create a structure to fund your goals through saving and investing

Most young people don’t think much about their retirement years, but starting early with a 401K can make a huge difference in the amount of money you have to support yourself after your working years. Upper education is also getting more expensive and student loans can keep you trapped for over a decade or more after school.

Look at the big expenses coming in your future and plan toward those. You may see that you’ll need to cut your budget, get a better job, or even a second one to improve your income toward savings. Small daily goals like taking a lunch from home or limiting entertainment costs can go a considerable way toward helping you reach your financial goals.

5. Protect your assets

If you are just starting out after college, be sure to get into your employers 401K or Roth programs and get any student loans paid down asap. Look at investing in home ownership if you plan to be stable for a while. If you have a family to take care of learn more about how trusts and wills work and consider securing some term life insurance. If you are nearing retirement age you’ll want to make sure you have a health account, and learn how to navigate Medicare and supplemental insurance. Look at nursing home expenses vs in-home care and secure your will. All of these items are essential to making the best use of your hard earned dollars.

6. Figure out your net worth

This step can be a lot of fun and can be a good indicator of your financial progress and success if it’s done regularly. First make a list of all of your assets. Home value, car Blue Book value, investments, jewelry/art, etc. Include the value of anything you own that you could sell. Next list your debts. Credit card totals, money you owe on a mortgage or vehicle loan, medical debt etc. Now subtract your debts from your assets. That is your net worth.

Additional Information:

Here are some great articles on some of the important topics that come up with your financial planning. As always FFEF has certified counselors who can help you review your budget and expenses and help you get a better handle on your finances.

Tax payments