Effective Estate Planning

CFP Board: 10 Steps to Achieve Financial Freedom This Year

Following the holiday spending ‘hangover,’ 2019 presents a clean slate for consumers to get their finances in order

Jan 24, 2019 — WASHINGTON, Jan. 24, 2019 /PRNewswire/ — With more consumers failing to keep, and maintain, a budget and with spending easier than ever with mobile payments, it is important for consumers to keep track of their income and what’s being spent. The good news is that anyone can take control of their finances this year and achieve financial freedom, says CFP Board Ambassador Lynn Ballou, CFP®.

“There are plenty of bad spending habits to acknowledge before achieving financial freedom,” says Ballou. “Instead of ignoring your bad habits and putting off addressing them until tomorrow or next year, take control… and tackle your finances today to start saving for tomorrow.”

Step One: Start Early

The earlier consumers can maintain a firm understanding of their cash flow, the better off they will be planning for the future, paying for unexpected expenses and saving for retirement. Whether you’re new to organizing your finances or a veteran financial planner, Ballou shares her top 10 tips to achieve financial freedom this year:

Create a plan
The first and most important step you can take in your mission to achieve financial freedom is to commit to a financial plan to help you achieve your goals in a timely manner.

Craft a budget
Budgets are the cornerstone of successful financial planning. They are living, breathing plans that reflect your intent and can be modified as your life evolves. However, do so thoughtfully and in writing to help you stick to the budget.

Pay down all consumer debt
And if you can’t pay it all off immediately, reduce it to its lowest possible cost by lowering the interest rate on remaining debt and paying off the highest rate debt first.

Create a personal impound account
Just like you pay your mortgage, taxes and insurance from an impound account, divide your allocated funds for vacations and gifts by 12. Then, put that money into a monthly personal impound account.

Create an emergency fund
The best laid plans can still go awry. Set up an emergency fund with an amount that allows you to withstand unexpected economic loss without destroying your finances.

Instead of ignoring your bad habits and putting off addressing them until tomorrow or next year, take control... and tackle your finances today to start saving for tomorrow...

Make time for a comprehensive casualty insurance review every year
Make a New Year’s resolution to call your agent for an in-depth review every year to see if you can cut costs.

Ensure your portfolio will match your needs in all the appropriate timeframes
If you’re unsure where your investment portfolio stands, meet with your investment advisor to confirm you’re on the right track to meet your goals in the allocated timeframe. If you are not, adjust as needed. Determine if your various account holdings are appropriate for the timeframes. If not, adjust them so they are.

Be philanthropic – but do so strategically
Begin by gaining an understanding of what you can afford to give and then determine how to balance the tax planning opportunities with your charitable intent.

Begin the estate planning process
Have you created a living will? If not, sit down with your estate planning professional to answer everything from who will manage your daily finances to who will make health care decisions and decide long-term care services.

Communicate your wishes to your successors
Create a book of knowledge filled with everything pertaining to the location of safes and contact information for estate attorneys.

“Simply remember,” said Ballou, “Create a plan. Review the plan. Improve the plan. Follow the plan. Lather, rinse, repeat.” Trust me, it works.





For more guidance on achieving financial freedom, talk to a CERTIFIED FINANCIAL PLANNER™ professional today or visit www.letsmakeaplan.org
Certified Financial Planner Board of Standards, Inc. is the professional body for personal financial planners in the U.S. CFP Board sets standards for financial planning and administers the prestigious CFP® certification – one of the most respected certifications in financial services – so that the public has access to and benefits from competent and ethical financial planning. CFP Board, along with its Center for Financial Planning, is committed to increasing the public’s awareness of CFP® certification and access to a diverse, ethical and competent financial planning workforce. Widely recognized by firms as the standard for financial planning, CFP® certification is held by more than 83,000 people in the United States.