7 Easy Financial Planning Steps You Can Take Now

Financial Organization, Planning, Budgeting

Financial planning doesn’t have to be a long, drawn out, intimidating or complicated process. In fact, for most people it is a straightforward process that can take very little time and reap huge rewards. With the advent of online financial tools you can choose to do-it-yourself, or you can enlist the help of a financial planner.

Either way, it’s vitally important to get started by following these key steps:

  1. Get Organized - Gather and categorize all documents, including bank and investment accounts, legal documents, insurance policies, etc.
  2. Know Where You Want to Go - Setting goals is about envisioning your future, what you want to have happen and knowing why it is important to you. Write your goals down; prioritize them and then quantify them (determine how much they will cost you).
  3. Know Where You Are Today - Create a snapshot of your current financial position which includes your current cash flow situation and your net worth. This becomes your baseline for measuring your progress and it also tells you what you have available to begin working towards your goal.
  4. Figure Out Where You Are Today in Relation to Where You Want to Go - For most people, there is a gap between what it is they want to achieve (i.e., retire on time) and their current financial position. If you determine that your retirement will require $1,000,000 in savings and your present savings is $100,000, then your gap is $ 900,000. Your plan will need to include a strategy for bridging that gap.
  5. Know Your Tolerance for Risk - Explore your attitude about risk. Realizing that, in order to generate a good return on your money, you will need to take a certain amount of risk, what does that mean to you? Without risk, there is no return, and a well-conceived, properly diversified investment strategy can help to reduce volatility while capturing returns in different segments of the market.
  6. Build a Safety Net - Before committing any funds to a long-term investment strategy, you need to establish and contribute to an emergency fund as a financial safety net. Shoot for accumulating six to twelve months worth of living expenses in a liquid account.
  7. Start Investing - The key to achieving your goals is to take action – save early and save often. The best approach for most small investors is to systematically invest into a diversified investment plan.

Once your plan is in place and the wheels start turning, it is extremely important to review your plan at least once a year. This will enable you to check its progress and make any necessary adjustments to keep you on track.


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The information provided is not intended to be legal, tax, or financial advice or recommendations for any specific individual, business, or circumstance. TowneBank cannot guarantee that it is accurate, up to date, or appropriate for your situation. Financial calculators are provided for illustrative purposes only. You are encouraged to consult with a qualified attorney or financial advisor to understand how the law applies to your particular circumstances or for financial information specific to your personal or business situation.

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