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Top 10 Financial Planning Checklist

Tara A. Conti, CFP^®

This Financial Planning Top 10 list covers some of the most common issues we see as financial planners.

1. Make a commitment to getting your finances in order
   Your money and finances are important. Devote some time and energy to get organized and know where you stand. Knowledge provides choices and more opportunities. Make it a priority in your life.
   
   
2. Set financial goals
   Where are you now? What do you want? What is the plan to get you where you want to be?
   
   
3. Track how you are spending your money
   They key to financial freedom is living within your means. Do you know how much money you spend and where your money is going? Are you spending money on things you value and enjoy? Many people do not know where their money goes and waste it on unimportant things.
   
   
4. Set up automatic savings and / or create a plan to pay off credit card debt(s)
   Create the habit of paying yourself first and saving some money every month, even if it is $5-$10. If you have credit card debt, you want to have a plan to get out of debt as quickly as possible. Once you are out of debt, start saving your money. This relates to living within your means and having excess cash flow to invest for the long term.
   
   
5. Create a cash cushion of 3-6 months of living expenses
   This cash provides a cushion for when emergencies happen or unexpected expenses come up. Then, you do not need to liquidate securities at the wrong time nor borrow at high interest rates. Unexpected things do happen. The cash cushion allows you to better handle the unexpected.
   
   
6. Get excess liability insurance and/or confirm the coverage limits
   Your investments and savings can all be lost if you are not properly protected. An excess liability (also called umbrella) insurance policy is relatively inexpensive and provides additional coverage on top of your homeowners and auto insurance policies. Accidents happen and you want to have the coverage to protect you and your family in this litigious society.
   
   
7. Obtain or confirm that you have the needed long term disability and life insurance for you and your spouse
   You need to prepare for the worst. Hopefully you will not need it, but if you do, you will be so thankful that you do.
   
   
8. Implement and review Estate Planning Documents yearly (Wills, Durable Power of Attorney, and Durable Power of Attorney for Health Care)
   If you have children, you NEED to have a will that states your guardianship wishes! Clearly stating what you want while you are living is the only chance you have to make sure those left behind know what you desired and what was important to you. Relationships, situations, and priorities change so you need to review and update your documents so they stay current with what you want.
   
   
9. Confirm named beneficiary designations on your life insurance and retirement accounts
   Named beneficiaries provide more flexibility in Estate Planning and stretching out IRA required minimum distributions. Pay special attention to contingent beneficiary designations as these can provide significant flexibility for disclaiming in the future.
   
   
10. Decide on an asset allocation and investment plan. Invest and rebalance your accounts regularly
    Your asset allocation is the most important factor in determining your future returns. Know what you are paying in investment fees and confirm that you are comfortable and staying “on plan.”

If you have any questions or would like help for how you go about accomplishing any of the items on this checklist, consult your financial planner or give us a call at Main Street Financial Solutions.

We believe you should have the peace of mind to know that you are on track to accomplishing your life and financial goals. Take the first step by developing an appropriate plan.

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