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
Take DIY financial check-up to the next level
Buy the book that inspired the checklist
