New Year, New Financial Resolutions:
5 Steps to Creating a Financial Plan

5 Steps to Creating a Financial Plan

With a new year comes new resolutions. Eating healthier, exercising more, or carving out more “me” time. While all these activities are worthwhile goals, a commitment to financial literacy in 2023 may also be worth considering.

What is a financial plan?

A financial plan is a comprehensive overview of your entire financial picture that identifies and prioritizes your financial goals and the strategies used to reach them. Examples of financial goals may center around reducing debt, paying for a child’s college tuition, or building an investment plan for retirement.

Steps to creating a financial plan

To create an effective financial plan, you’ll need to bring various aspects of your finances together. A comprehensive financial plan typically includes budgeting, investing, retirement/tax/estate planning, charitable giving, and risk management assessment, among others.

  • Determine your goals. When listing your financial goals, include short-term goals, long-term goals, and (yes!) dream goals. Your wealth advisor is there to guide you along the path in helping make your financial dreams come true.
  • Gather and organize your documents. Your wealth advisor will need to review your latest tax returns, bank statements, and investment/retirement account reports. Additionally, a list of assets, such as real estate, and liabilities, such as loans, will be needed, and you’ll want to list your monthly income and expenses.
  • Establish your plan. Now that you have a clear picture of where you stand financially today and where you want to be tomorrow, your wealth advisor will propose an investment strategy aimed at meeting your needs and orchestrate a comprehensive plan so that all aspects of your financial life are working in harmony.
  • Execute your plan. Based on your goals, your wealth advisor’s recommendations are now put into action. For example, more of your paycheck may go into a Traditional or Roth IRA, while also opening a 529 account for your children’s college education.
  • Review your plan. Life can change in the blink of an eye, so it’s important to let your wealth advisor know of any changes that may affect your financial plan. Set the tone upfront by communicating how often you prefer to meet with your wealth advisor. While annual meetings are typically a minimum requirement, let your wealth advisor know the frequency that would provide you with the most comfort.

The beginning of a new year is a time to reflect on the past and plan for the future. By setting personal and financial goals, you’ll increase the likelihood of success for 2023 and beyond.

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LS Investment Advisors, LLC (dba LSIA) is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.