9 Items That Should be Included in Your Financial Plan

By Lisa Strohm, Founder & CEO, The Athena Network

A financial plan is an important tool to assess your level of financial wellness.  It can help identify gaps in your financial picture.  Once these exposures are identified, you can work with your financial advisor to address them.

Unfortunately, many financial advisors and planners offer what I (and others in the industry) refer to as” financial planning lite” — a very cursory attempt at financial planning, often offered as an up-front “enticement” to convince a prospective client to let the advisor manage their investment portfolio. This “lite” version of planning typically deals only with the client’s basic goals and investment outlook. 

So what should a true, value-added financial plan include?   For most people, a thorough financial plan will have many of the following components.  (Note that this is not an exhaustive list, as your situation may require additional analysis).

  1. Statement of Financial Position. Also known as the “Net Worth Statement”, this calculates the difference between what you own and what you owe.
  2. Financial Independence Analysis. This analysis determines at what age you may have the option to continue working or not, given different savings and Social Security strategies, as well as other factors.
  3. Tax Planning. Careful planning throughout the year can help you reduce the taxes you pay and better enable you to achieve your financial goals.
  4. Education Planning. This involves saving for your or a loved one’s education.
  5. Estate Planning. It is critical to put into place the correct documents and to title assets properly to ensure the orderly disposal of your estate upon your passing. Your estate plan may also include strategies to minimize potential federal estate taxes.
  6. Lifetime Gifts to Individuals and Bequests to Charity. This involves structuring gifting vehicles, and assisting you in deciding how to attain the most impact per dollar gifted.
  7. Insurance Planning. Examine the sufficiency, quality, and cost-effectiveness of your existing insurance coverage, and identify if there is a need for coverage where none currently exists. Types of coverages considered includes life, long-term care, disability, auto, homeowners, umbrella, and others.
  8. Contingency Risk Analysis. Examine the potential need for identity theft protection, a financial emergency kit, prepaid legal services, a prenuptial agreement, and other risk management vehicles.
  9. Employee Benefits Analysis: Evaluate the benefits available to you through your employer and choose those most appropriate for you needs.