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8 Components of a Good Personalized Financial Plan

At Chatterton & Associates, we’ve helped individuals and families build wealth and achieve financial security and freedom. Throughout our years of experience, one thing has always been clear: each and every client is different and brings their own goals, concerns, and preferences to the table. The importance of personalizing your financial planning strategies can’t be overstated.

Our experienced financial planners are here to discuss the essential components of a good financial plan and how to tailor yours to accommodate your financial objectives so you can prepare for a comfortable retirement.

1. Know Your Current Financial Position

Creating or improving a successful financial plan should always begin with a thorough analysis of your existing financial situation. At Chatterton & Associates, the first step of our process is to conduct a proactive financial review focused on essential elements of your finances, including your current net worth, all assets and debts, taxes, and cash flow needs.

2. Define Your Short-Term and Long-Term Financial Goals

Most people create a financial plan with the hope of creating, preserving, and passing on their wealth. But this journey looks different for everyone, and your goals are unique and personal. Clearly defining your objectives will help you stay on track to achieve them.

It’s helpful to think about your short-term and long-term goals as separate but complementary:

Examples of short-term goals: Examples of long-term goals:
  • Saving for a vacation or large purchase
  • Paying off a debt
  • Saving for a home-improvement project
  • Retiring at a certain age
  • Paying off a mortgage
  • Buying a vacation home
  • Paying for a family member’s education

3. Create a Retirement Plan

Working with a Certified Financial Planner™ (CFP®) to create an individualized retirement plan can help you achieve your financial objectives more quickly and secure a more prosperous future. A comprehensive retirement plan should generally include:

Related: 7 Signs You Should Talk to a Certified Financial Planner

4. Track Your Cash Flow

Tracking and managing a personal budget is one of the most frequently overlooked components of a good financial plan. At Chatterton & Associates, our financial professionals use advanced modeling software and retirement planning worksheets to help us keep track of your income and expenses and find realistic, achievable areas for improvement.

5. Focus on Debt Management

There are many types of debt, and not all of them are negative. But in general, the goal is to pay down debt as you approach retirement so debt payments are not a significant portion of your expenses. It starts with taking inventory of all your liabilities, budgeting for repayment, and choosing the right debt reduction strategies.

6. Include a Tax Strategy

It’s easy to overlook the role taxes play in long-term financial wealth accumulation, but an intelligent tax strategy can save you substantial amounts of money, time, effort, and stress. 

At Chatterton & Associates, our approach to tax planning involves in-depth tax projections and personalized strategies to ensure you keep as much of your income as possible every year. We also offer individual and business tax services to help you save money and time, avoid costly errors, and help reduce your risk of being audited.

7. Protect Yourself With Insurance Coverage

A good financial plan generally involves risk reduction as you approach retirement. But some types of risk in retirement are unavoidable. You can help protect your personal and financial interests by maintaining some essential types of insurance coverage, including:

  • Health insurance
  • Homeowners insurance
  • Car insurance
  • Umbrella Policies
  • Disability insurance
  • Long-term care insurance
  • Life insurance

8. Develop an Estate Plan

If you want to ensure your wealth and legacy are protected and given to the people or organizations you care about upon your passing, estate planning is a must. At Chatterton & Associates, we partner with attorneys to establish the right kind of trust for your situation and give you the peace of mind that your wishes will be respected and carried out.

Related: Which Trust Do You Need for Your Estate Plan?

How to Create a Financial Plan

Try the DIY Approach

Most people benefit from working with a financial planner to grow and maintain their wealth. But in some situations, you may want or need to build your own plan. But before you get to work on your DIY financial plan, it’s helpful to ask yourself a few important questions:

  • Do you find reading about and managing money enjoyable?
  • What is your level of financial literacy?
  • Do you have enough time to dedicate to your finances?
  • Are you comfortable with making decisions and managing risk?
  • Do you understand the tax implications of different types of investments?
  • Do you have an understanding of different types of retirement accounts?

Work with a Certified Financial Planner™ (CFP®)

It’s certainly possible to create your own financial plan. However, there are many situations in which it makes sense to work with a CFP®. A CFP® is required to go through rigorous training and have a fiduciary responsibility to act in the best interests of their clients.

A CFP® is knowledgeable in financial and retirement planning, tax reduction strategies, portfolio management, insurance, estate planning, and more. But, not all financial planners are created equal. If you choose to work with a CFP® to help you achieve financial freedom and prosperity, you should look for the following:

  • A true fiduciary
  • Someone who takes the time to listen and understand
  • Integrated financial, tax, and legal services
  • A proven record of trust and integrity
  • Excellent testimonials from clients
  • Transparency about fees and commissions

Financial Planning with Chatterton & Associates

At Chatterton & Associates, we help individuals, families, and businesses develop and implement effective long-term financial plans. We’ll work with you to review your current situation, discuss your needs and preferences, and offer personalized recommendations to help you reach your financial goals and protect your assets.

Our experienced financial advisors are here to assist you in achieving financial freedom and success now and in the future. Contact us today to speak with our financial professionals.


The Team at Chatterton & Associates

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