Your Comprehensive Financial Planning Checklist

Most of us have heard the phrase, “If you fail to plan, you are planning to fail,” which Benjamin Franklin supposedly once said. The proverb especially rings true for a whopping one-third of Americans when it comes to comprehensive financial planning. Whether they have other financial priorities, encounter unexpected emergencies or simply “haven’t gotten around to it,” 21 percent of Americans have no savings to speak of, and another 10 percent have saved less than $5,000. These shocking statistics are exactly why you should put together your own financial plan as soon as possible.

Here is where a financial advisor comes in.

We believe that what a good fee-only financial advisor should be doing for you first is going through a comprehensive financial planning checklist. The advisor should not only ask about your financial goals during your initial meeting, but also what you envision the rest of your life to look like, financially or otherwise. Only after they learn about you as a person will they be able to advise you on the best path to securing your financial future.


Ready to talk with a fee-only financial advisor? Contact Financial Freedom to see how we can help.


Comprehensive Financial Planning Checklist Defined

First and foremost, let’s define what a comprehensive financial planning checklist is all about. At first glance, checking off a list of boxes might seem rudimentary. But it is much more sophisticated than what meets the eye. A checklist can be a very effective tool. It is the starting point for your financial advisor to understand your unique situation, ensuring that your personal financial plan is thorough and meets your specific needs. And it makes you think about things that you might not normally give much thought to.

Of course, not every item on the checklist will be relevant to you, but that’s the point of having one. For example, if you don’t have credit card debt and don’t ever plan on getting into debt, it’s an essential piece of information that will allow your financial advisor to tailor a financial plan just for you.

Simply put, the value of having a checklist is in painting a whole picture of where you are now so that you are on track to go to where you want to be.

With that being said, here are some of the items that should be included in your comprehensive financial planning checklist.

Your Personal Financial Statements

At a minimum, you will need to take a realistic look at your personal financial statements, especially your balance sheet and income statement.

Balance Sheet

Listing all the valuables that you own (assets) on one side and all the money you owe (liabilities) on the other side will allow your financial advisor to assess your current financial situation. If your assets are more than your liabilities, you have a positive net worth. If not, you have a negative net worth, which is a red flag that signals your lack of financial health, and we recommend you take corrective action immediately.

Your assets can include, but are not limited to, the following items that you own and can sell for cash:

  • House
  • Land
  • Car
  • Valuables like jewelry or antiques
  • Investments
  • Stock options

Your liabilities might include items that you owe money for:

  • Mortgage
  • Auto loan
  • Student loans
  • Credit card debt

Income Statement

Businesses track their income statements to see how much money they make in a month, quarter or year. We suggest you should be doing the same for your personal income statement.

Your current income is likely your salary. Your future or retirement income could come from Social Security, retirement benefits or investments.

Your current expenses can be any of the following:

  • Income taxes
  • Utilities/Phone/Internet
  • Home maintenance
  • Homeowner’s insurance
  • Health insurance
  • Food
  • Entertainment
  • Gas/Car repair
  • Property taxes

Your future expenses might include:

  • College for kids or grandkids
  • Vacations
  • Retirement living
  • Life insurance

These are just some of the bigger items on your expense list. With several potential current and future expenses, it is essential for you to understand where your hard-earned money is going. Expenses can get out of hand quickly if you don’t reign them in.

In addition to the above income and expense items, annual savings is an important element to include as part of your personal cash flow. Assuming that you are currently working, are you saving at least 10 to 15 percent of your income for emergencies, retirement and other potential savings needs?

Tax Efficiencies

We believe that another item on your financial advisor’s checklist should be to maximize your tax savings, which can include tax-loss harvesting and tax deferrals. It could also mean knowing when to contribute and when to withdraw from your retirement accounts, such as IRAs and 401(k)s, in order to minimize your taxable income each year.

Non-Financial Goals

At Financial Freedom, we believe that a comprehensive financial planning checklist should also cover non-financial goals that you may have, because they directly affect your financial goals. For example, if you want to retire early, your financial plan will need to be adjusted accordingly. Or perhaps you would like to get involved in philanthropy and support non-profit organizations. How can you do so in a way that maximizes your tax deductions?

Contingency Plans

Medical emergencies happen. Cars break down. Homes need repairs. Jobs are not guaranteed. Your financial advisor should go over contingency plans with you and give you a better understanding of preparing for them, which might range from having an emergency fund that covers at least three months of income to buying the right insurance that covers you in case of unforeseen events.

Final Thoughts

As you can see, a comprehensive financial planning checklist isn’t merely about checking off a bunch of boxes. Having a solid list in place allows your fee-only financial advisor to learn about your whole financial picture and connect the dots on intertwined pieces of your life that come together. As a result, you can have the peace of mind that you and your loved ones are taken care of, not only now but also in the future.

Equally important is reviewing your plan with your financial advisor on a regular basis. We understand you’re busy. Life gets in the way. And comprehensive financial planning can end up on the back burner. But things change. Your goals evolve, your family grows, the stock market goes up and down. All of a sudden, your current financial plan may no longer suit your needs. We believe that’s why it makes good sense to have an ongoing relationship with a fee-only financial advisor to regularly make sure you are still on the right track. The more you plan, the more likely you will have a prosperous financial future.


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Filed Under: Comprehensive Financial Planning