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How to Build a Financial Plan

How to Build a Financial Plan

November 18, 2020

Being smart with your money doesn’t have to be complicated – it just takes a well thought out financial plan. With a little forethought and organization, you can create a clear financial plan for your future - one that takes the stress out of saving and makes achieving your financial goals easy and straight-forward.

A financial plan is important to help you understand your current financial state, determine where you want to go with your savings strategy, and ultimately create a road map for achieving it. Here’s how to do it.

Assess your current financial picture

Take a hard look at your income and expenses for the month. Even more useful is to categorize your spending – how much are you spending on rent, your mortgage or utilities? What about things like food, transportation and entertainment? Track your spending for a few months to see where your money is going and be honest with yourself about what can and cannot change with your current spending habits.

One simple way to do this is categorize your expenses between fixed and variable. Fixed expenses are your everyday expenses like food, electricity, transportation. Variable are expenses that change from time to time based on your lifestyle dinning out, traveling, entertainment, etc.

Determine where you want to go and set goals

As you think about your future, try to be as specific as you can about what you want your life to look like in 5, 10 and 20 years from today. Do you imagine retiring early, starting a business, buying a second home, or traveling extensively in retirement? More specifically, do you want to leave a legacy for the next generation, would you like to help in paying for your kids or grand kids college tuition, do you have any charitable inclinations, etc.? Planning for the future should include major milestones like these that you foresee in your future.

Set a few realistic short- and long-term goals that best match up with the future you envision and put a dollar amount on those goals.

Start saving

Once you’ve determined your goals, then it’s time to put your money to work. You’ve eliminated some stress in knowing where to put your money because you have designated “goal” buckets. Now it’s time to focus on prioritizing your expenses (maybe it’s not eating out as frequently?) and start investing in a strategy that aligns with your objectives. Speak with a financial planner to determine what kind of balanced portfolio makes sense for your personal goals.

Give me a call at 305-671-3914 to get started with making your financial plan today or if you already have a financial plan and would like a second opinion.

About the Author:

Dennis Coral is Managing Director and Founder of Coral Wealth Management, an Independent Financial Advisory firm. He has over 17 years of experience in the financial services industry. Dennis is a frequent speaker and guest lecturer at Florida International University. Prior to founding Coral Wealth Management, Dennis held leadership roles as Vice President at Morgan Stanley and SunTrust Bank.

This material has been prepared for information purposes only, and it is not intended to provide, and should not be relied on for tax, legal or accounting advice. No representations, warranties or guarantees are made to the accuracy of any estimates or calculations. Past Performance is not guarantee of future results. Coral Wealth Management, LLC is a registered investment adviser with its principal place of business in the State of Florida. Coral Wealth Management and its representatives comply with the current registration requirements imposed upon registered investment adviser by those states in which the firm maintains clients.