By Harlan Storey

What goals have you set for 2019? Perhaps you want to improve your physical health by fine-tuning your diet and adding a new exercise routine. Maybe you are focusing more on improving your emotional well-being and strengthening relationships in your life. Or maybe your focus is set on taking your career to the next level this year. These are all worthy goals, but we urge you to include one key goal that many overlook: setting up your financial plan. It’s one of those things you know you should do but keep putting off. So why not make 2019 the year you finally cross it off your to-do list? After all, having a solid plan in place is a vital first step toward achieving your financial goals. Here’s how you can get started.

1. Create Your Budget

Do you have a budget? The foundation of any financial plan is knowing exactly how much you earn, how much you spend, and what you spend it on. So your first task is to record everything you spend for at least three months (the longer, the better). This can be done by carrying around a small notebook, entering your expenses into a budgeting app on your phone, or automating the process with a service like Mint. You can even check with your bank to see if their app has one of these tools built in. At the end of three months, calculate your average monthly spending for various categories (food, entertainment, utilities, clothes, gas, recurring bills, etc.). If you’ve never done this before, I bet the results will surprise you!

2. Set Financial Goals

Now that you have a clearer picture of where you are now, it’s time to define where you want to be in the future. When would you like to retire? At what level of luxury are you planning to live? How much will you need in your retirement account to afford this quality of life? And while retirement is a big part of financial planning, it is important to include all of both your short-term goals and long-term goals. Do you want to move into a new lake house in 10 years? Pay for your children’s education? Donate to charities? Write it all down and make sure your plan is set to help you achieve all your goals.

3. Design A Savings Road Map

Once you’ve defined where you are now and where you’d like to be, it’s time to make a plan to bridge the gap. Assuming an average income and return on your investments, how much do you need to put away each month to reach your goals on time? Does your budget allow for this? If not, what steps can you take to either reduce your monthly spending or increase your monthly income?

4. Put Together Your Portfolio

Unfortunately, stockpiling your savings under your mattress won’t get you very far. The key to achieving your financial goals is creating an investment portfolio strategically diversified to meet your personal needs. The earlier you get this started, the more you’ll benefit from the exponential power of compound interest.

5. Define Your Exit Plan

The last part of your plan is creating exit strategies for each goal. You need to be able to access your money when you need it. If you skip this step and just dump all your savings into retirement accounts, you’ll be in for an unpleasant tax surprise when you want to pay for the aforementioned lake house or college education. So keep in mind when you’ll need to access your money and how to set up your portfolio accordingly.

6. Schedule Check-Ins

Once you’ve set up your plan, you’re well on your way, but your work’s still not quite finished. Just as important is taking the time to periodically maintain. You’re bound to experience many life changes between now and retirement, and you must adjust your plan accordingly. Check-ins are easily brushed off and forgotten, so it’s best to schedule them into your calendar. As a simple rule of thumb, we suggest you aim to review your progress every six months or whenever your life situation changes (income change, change in expenses, change in goals, etc.).

Next Steps

Now that we have laid out some steps, it is clear to see that setting up a financial plan is actually simpler than most think. However, while a tried-and-true process can make it simple, it can have its challenges. It is easy to get stuck in the details and become overwhelmed. Fortunately, there are professionals ready to help you through every step. Our team members here at Storey & Associates are experts in designing personalized financial road maps to help people achieve their goals. If you’d like to learn more about how we can help you set up your financial plan, get in touch with us today by calling 330-526-8944 or shoot us an email at info@storeyassociates.com. Or, if you prefer, you can quickly and easily click here to schedule your free initial consultation online.

About Harlan

Harlan Storey is president and founder of Storey & Associates with more than 30 years of experience providing financial counsel to individuals, families, and small businesses. With a background as an estate planning attorney also providing tax services, Harlan now advises a clientele consisting of corporate executives, medical professionals, small business owners, and retirees. He specializes in income tax planning, business exit strategies, estate and insurance planning, asset allocation, and career transitions. In addition to his role as a financial advisor, Harlan is a member of the firm’s investment committee and manages the operations of the business. Harlan is a CERTIFIED FINANCIAL PLANNER (CFP®), member of the Financial Planning Association (FPA), and graduated from the University of Akron with degrees in accounting and law. Harlan was one of the earliest members of the National Association of Personal Financial Advisors (NAPFA), showing his commitment to fee-only financial planning. Harlan and his wife reside in North Canton, Ohio, and are the parents of two adult children. He enjoys spending time outdoors, running, kayaking, and tending to their two horses. Learn more about Harlan by connecting with him on LinkedIn.