Your Financial Planning Checklist

Looking for a resource to make sure your finances are in good shape? This financial planning and wealth management checklist is a good place to start.

Debt Checklist

• Pay off your credit cards monthly
• Establish a Home Equity Line of Credit for emergencies and short-term cash needs
• Make certain you’re paying off your high interest rate debt
• Don’t take on too much debt compared to your assets (consider capping debt at 25% – 35% of your net worth)
• Only borrow for investments that target strong returns that are competitive with what you can earn in stocks
• For more, see Using Debt Smartly to Build Wealth and The “New” Rules of Debt

Spending Checklist

• Track spending to fix any problem areas
• Verify you’re using all your monthly subscriptions

Reducing Taxes

• Avoid realizing short-term capital gains
• Have a low portfolio turnover rate in your taxable accounts (sub 35%)
• Maximize retirement plan contributions if you’re an employee
• Have a retirement plan to maximize contributions if you’re a business owner
• Contribute the maximum to IRA accounts
• Contribute the maximum to a Health Savings Account if that is an option at work and the right fit for your health
• Gifting to charity with something other than cash, such as with appreciated securities or an IRA Qualified Charitable Distribution
• For more, see Smarter Tax Planning

Cash & Investments Checklist

• Establish a rainy day fund covering at least 3-6 months of expenses
• Divest from investments that are not earning a competitive long-term return
• Maintain the right asset allocation and ensure you’re investing your excess cash
  • Short-term money (needed in next three years) is invested in cash
  • Long-term money (needed at least 10-15 years from now) is invested in stocks
  • Mid-term money (needed between 3 and 15 years) is in a mix based of stocks and bonds based on when you’re going to need the funds and how much per year
  • For more, see The Easiest Way to Increase Your Investment Returns and Fleeting opportunities: Two Things to do in Your Portfolio Now
• Avoid speculative investments that could go to zero – For more, see Understanding Investment Rule #1
• Invest only in illiquid investments that target higher returns
• Maintain a diversified portfolio
• Use a 529 plan to save for college – For more, please read 529’s and Financial Aid
• For more, please read Investment Mistakes to Avoid

Asset Protection Planning

• Protect your plan from disability through insurance and a Power of Attorney and Health Care Proxy – For more, see Disability Insurance Overview and Tips
• Protect your plan against early death with life insurance and up-to-date wills and trusts – For more, see You Need an Estate Plan
• Confirm your beneficiary designations are up-to-date and accurate
• Title your assets correctly
• Maintain up-to-date and sufficient home, auto, and umbrella insurance coverage – For more, see Minimizing Personal Risk and Liability to Protect your Wealth

Finding the Right Advisor for more help with these financial planning/wealth management checklist items

• Offer financial planning and investment management for a fee of 1% or less
• Fiduciary
• Independent
• Clean compliance record (check here)
• Financial planning work is done by a CERTIFIED FINANCIAL PLANNER™ professional and the investments are managed by a Chartered Financial Analyst^® (or teams of both)
• They build a financial plan for you before deciding on an investment plan
• For more, see Finding a Good Financial Advisor