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According to the words of John Maxwell, “a budget is people telling their money what to do instead of wondering where it went.” This then brings the question, why is it vital to budget your income? It would be wrong for me not to tell you the whole truth which is, the perfect road map to achieving financial freedom is by budgeting.

A budget acts as the compass that directs and maps your course towards wealth creation, not to mention it helps to improve your living standards. Have you ever wondered how a ship captain navigates through the high seas yet there are on paths that he can follow? He is guided by the help of a compass; it assists him to know his current location and helps him steer his ship through the waters until he gets to his destination.

Financial confident people work with a budget. A good budget ensures you live within your means hence avoid unnecessary spending. It also helps you save part of your income. In order for your budget to work for you then it should meet some standards. But one of the most crucial elements of a good financial plan is that it should always be based on your financial goals.

Budgeting is not just about keeping track of your expenditure but it also includes helping you meet your personal financial targets in life. This is because, without financial goals in life you will never be in control of your money. To improve your financial status, start planning your finances carefully.

College planning can be confusing, complex and stressful, especially if you have no previous knowledge or experience with the process. With so much to learn and handle at this vital time in a student’s life, it is important to properly educate yourself so that you can make the most informed decisions for your particular situation. Thousands of helpful resources are available on the Web, and it can be difficult to determine which are credible and worthy of your time. I know this only too well – I am a parent of a high school senior, who’s applying for college this year!

Zakta’s newest Web Guide collection, “College Planning Made Easy,” is a collection of the best Web sites, articles, videos and more on a variety of topics related to the college planning process. This has been put together by me and other members of the growing Zakta community.

College-ready students and parents will benefit from Zakta Guides in four main categories: Choosing a College, Applying for College, Paying for College and College Living.  It features resources and advice ranging from choosing the right college and what to study in school, to preparing for standardized testing. The collection also offers a variety of financial aid resources, including basic information on how to apply, how much money is available and how the programs work.

If users don’t see the information they’re looking for, they can submit a topic idea to Zakta, who will then evaluate whether it’s a college planning topic others would be interested in learning more about as well. If so, the Zakta team, with the help of other members, will research the topic and create additional Zakta Guides as necessary, organizing the best, most relevant information available on the Web.

Most importantly, the beauty of Zakta is that it enables people to share their knowledge or expertise with others in an organized, effective manner.  Users who have already been through the college planning process or have specific expertise can share their knowledge with others by creating and sharing a Zakta Guide of their own.

As always, we are eager to get your feedback.

“Every time you build into the life of another person, you launch a process that will never end.”
– Howard Hendricks

The nature of financial planning has started to change dramatically in the past 10 years with the movement towards “financial life” planning. Financial life planning is about more consciously integrating both your life and money into the financial plan and investment portfolio. Some leading financial planners will say they have always helped clients plan for their life as a matter of course. They have never labeled it this way. On the other side, the wider public perception is still that financial planning is about investing and planners do not care beyond the money.

Once consumers know they can find a more “humanized” financial planning approach then there will be much greater pressure on financial planners to expand their role and processes from financial management to coaching, mentoring and life planning.

On the basis that helping clients reach their goals is fundamental to financial planning then helping them understand who they are and their life plan is critical. These aspects are fundamental to a role which involves a greater emphasis on the non-financial issues. Sounds basic but why do so many planners not perceive addressing the life and human issues to be part of their role?

The results of a survey conducted in February 2009 by David Debofsky and Lyle Sussman indicate that 89% of financial planners who are members of the CFP Board and/or Financial Planning Association do at some point engage in non-financial coaching and counseling, and 74% of these planners say they have increased this work over the last 5 years. Further, advisors are indicating 25% of their time is spent on the non-financial issues. The non-financial issues that come up the most include 81% personal life goals, 66% career and 44% physical health. Then add to this clients are now bringing up 10 to 20% of the time with their planner emotional issues like divorce, addiction, mental health and spirituality.

What all of this is showing is that the role of the planner is changing towards dealing with the life and human issues at a greater level even if the advisor is not deliberately changing his or her process. Based on our research in February 2009, we found that 50% of planners are still only spending 1 to 3 hours up-front in the client discovery phase addressing your needs as a client. This is clearly not enough to properly address the life issues. Of course, not all planners will accept their role is beyond financial analytics and also not all consumers will want to address personal issues with a financial planner. Notwithstanding, the practical issue is that many of you as clients are going to encounter situations or needs which require the planner to address the non-financial issues as part of providing financial advice. A financial planner is ideally positioned to help you on the non-financial issues because money is naturally integrated to them. Luckily, there is an increasing amount of quality training for advisors to go down the coaching, mentoring and life planning path.

The primary benefit of a financial planner becoming your coach or mentor is that it will help in building a deeper long-term relationship based on trust and a higher level of mutuality. This is vital for helping you make significant and long-term financial decisions. Walking the road of life with a financial planner will enable:

Clear guidance to be obtained on both the financial and life issues. Wisdom from one who has both financial and life experience. Learning from the success and mistakes of another. A true partnership based on sharing who they are.

If you are going to choose a planner to go beyond the numbers and be a central point in your life journey then it is important you choose a person who is capable of:

Developing a safe, mutual and structured environment for the coaching or mentoring. Developing a clear coaching or mentoring process with protocols established, including for engaging you in the discussion of the non-financial issues, asking the right questions with empathy, and facilitating difficult discussions. Engaging in a personal development process for him or herself personally through using a coach or mentor of their own. A planner cannot guide a client to a place where they have not been themself. Using robust assessment and facilitation tools that will provide a more objective and reliable understanding of who you are and personal development to meet your unique needs.

Start Humanizing Your Financial Planning and Increasing Your Financial Life Performance

So, whether you are an investor, entrepreneur, executive, financial advisor or a student take action with the following steps:

Complete the Financial DNA® Profiles to discover the core of who you are. Develop your own goals based on a clear life purpose. Define what a quality life means to you. Identify the resources in your personal and professional life you need to grow. Start working on the steps needed for getting to the next level of success. Make part of your growth plan having a financial planner who can provide guidance in all the dimensions of your life.

For access to mentoring and coaching programs on an individual and group basis refer to the Financial DNA Resources website for more information: www.financialdna.com.

No matter what stage of career you’ve reached, or even if you’ve retired, there’s a number of key questions that you should be able to answer to give yourself the confidence that you’ve addressed all the important areas of your financial planning.

So, today, I’m going to run through the key areas that we run through with each client to take a ‘barometer’ of their financial planning health.

Let’s get started.

So, have you…?

1. Really thought about what you want for the rest of your life?

The dreaded ’setting goals’ part…You’ve already done this for your career and no doubt in other parts of your life as well. So, now’s a good time to take stock and think about how you want your life to look from now on. It may well be that it’s in tip top order and nothing needs to change – the key is to go through this ‘discovery’ process with you and your significant other.

2. Fully organised your various assets and analysed how they will help you achieve your goals?

A major goal for all doctors and dentists is planning towards retirement. I presume you have other goals as well, ones that will require money to achieve? So, the question is: will what you’re doing now with your finances allow you to achieve your most important goals? You may or may not know the answer to this. After all, it can sometimes be difficult to work out whether you’ll have enough money for your future.

3. Completed a detailed expenditure plan so that you’ll know how much money you’ll need to live the life you want when you stop working?

How much money, after tax, will you need to fulfill all your goals once you’ve stopped working (and the salary/net profits have ceased)?

£3,000 per month?

£5,000?

£10,000?

What’s YOUR number?

This exercise is crucial and it’s what drives many of the financial decisions that you’ll face between now and giving up work.

4. Created your own Financial Forecast to show when your ‘Financial Independence Day’ will be?

At what age COULD you give up work if you chose, even if you decided to continue working? Financial forecasting will allow you to see your financial future and help you make your financial decisions. Now, it probably IS possible for you to do this exercise yourself, maybe using Excel or a similar tool. However, I would advocate using the services of a financial professional that provides this sort of analysis. Not all do, so you may need to do some detective work. A good place to start is the Institute of Financial Planning’s website.

At the site you’ll be able to search for Certified Financial Planners (you’ll find yours truly on there). Whilst that will not guarantee that they offer financial forecasting to their clients, there’s a high probability that you’ll find one that does.

The KEY benefit is that you’ll be able to work alongside someone that is able to provide you with an objective viewpoint without having an emotional attachment (that inevitably you and your friends or family would have).

5. An overall written Financial Plan and Strategy to guide you over the years?

If you’ve taken the time to take action on the steps above, the KEY is to implement your plan. What action do you need to take to increase your chances of achieving your most important goals?

You’ll probably find that there’s quite a bit of work involved initially, but if you set things up the right way, the ongoing time required to keep your financial plan on track should be minimal, especially if you are using a Financial Planner to drive’ the whole process for you.

Yes, ok, I’m obviously a little biased in my comments seeing as I earn my livelihood from working as a Financial Planner. But let me ask you a question.

How valuable is your time?

Looking at it another way, do you do your own accounts each year?

Exactly! So why spend hours each year trying to learn a skill that you can outsource to a competent professional who performs that role all their working lives?

Choosing the right Financial Planner is a very important decision. Take your time and make sure they are offering a long term strategic financial planning service, rather than a product retailing service (which actually may be fine if that’s all you need).

And make sure you pay them a fee for the service they provide. If they only work on a commission basis, guess what will probably happen at some point in your dealings?

Think about it, how else would they earn an income if you don’t buy a product? (that’s not to say commission is bad – I just believe it should not be used to remunerate a Financial Planner who is providing you with a comprehensive financial planning service).

6. Made sure your Wills are up to date? (assuming you have one)

You do have a Will, don’t you?

If not, this step is crucial. Let’s say you’ve gone to the trouble of putting in place all the steps highlighted. By not taking this last step, all your hard work could be undone. Without a Will, you would die ‘intestate’ and your assets would NOT be distributed in line with your wishes.

So, contact a solicitor and get it set up! The cost is not too much and once you’ve done it you’ll be able to tick another box on the road to creating your robust financial strategy

Whilst you’re getting the Will sorted, ask the solicitor about setting up Lasting Powers of Attorney. In brief, These are legal documents and they provide consent to another party to act on your behalf to deal with your relevant financial matters should you be incapable of doing so.

7. Investigated how much risk you are taking with your investments?

If you have ANY money invested in traditional investment schemes such as personal pensions and equity ISAs, you owe it to yourself to take the time to analyse how risky your investments are. Sadly, some medics and dentists believe they have diversified their risk simply by holding a number of funds within their ISA/pension. But what if all these funds are equity based funds? It’s entirely possible that they are taking too much risk with their money but may not necessarily have access to the right information to make better investing decisions.

8. Analysed how much risk you SHOULD be taking?

Even if you have a good grasp of how much risk your money is exposed to, do you actually know whether you should be taking more or LESS risk in order to achieve your goals? For example, if you’re on track to achieve all your goals, you may be able to reduce the amount of risk you are taking and still remain on track.

9. Checked how much you are paying in investment costs?

When you invest any amount of money into ‘mainstream’ products, such as Equity ISAs and personal pensions, a certain percentage of your money will be taken in charges levied by the investment company/product provider. Typically, these may include:

sales/advice commissions initial charge for the investment (usually ranges between 0-5%) ongoing annual management fee other fund expenses (known as Total Expense Ratio) trading costs within the fund(s) Now, I appreciate that delving into all this may not overly excite you. That’s fair enough. But just because you don’t have the time/interest/inclination doesn’t mean you should ignore it!

As with point 5, get it outsourced to a competent professional. The end result you’re looking for is to check how much you ARE being charged and whether you are able to reduce these, where possible.

10. Recently completed a proper psychometric risk evaluation?

What makes you tick? Do you know why you’ve made certain investment decisions in the past? What influences your decision making process? Rather than simply judging your attitude to investment risk on a scale of 1:10, you need to go ‘deeper’. There are tools available to help you understand how you make financial decisions and how to improve your ability to make these important decisions. Ask us, or your financial adviser/planner, for more information.

BONUS STEP

11. An Investment Philosophy to take you through good times and bad?

Does your investment portfolio consist of a collection of funds that perhaps were selected a number of years ago (and have not been reviewed since), or do you have an investment philosophy that underpins all your decisions?

It’s probably fair to say that many medics and dentists will fall into the former camp, although that’s often the case because their financial adviser/planner has not developed an investment philosophy of their own. Ask your adviser/planner (if you use one) what philosophy they are using for the management of your money.

So there we have it. If you’ve read this far then you’re obviously serious about your financial future. Now all you have to do is take action and make it happen!

So many people are lumbered with credit and other cards and some of them struggle to make those monthly repayments. If this describes you then you would be well advised to consider looking into debt consolidation and some help with financial planning to avoid risking bankruptcy. Loans are also available, but you should take time to analyze all the possible options.

The simplest way to do debt consolidation with credit and other cards is to transfer the combined balances onto another credit card with low interest rates and one low monthly payment. Most card companies do offer special introductions with low rates for this type of consolidation just for trying their card. However, though obvious, make sure the balance on your new card will cover the outstanding balances of your other cards.

Look for low interest transfers to allow for successful consolidation. Many cards offer these transfers at just 0% interest over an agreed to time period, making them perfect for consolidating your credit and store card balances. However, before taking the plunge you should understand your own situation and how much you can afford for monthly repayments. Never transfer any further balances onto a card when the introductory period is over and the transfer rates have risen to regular high levels. You could jeopardize your situation and ability to pay. What would you do at this point if your personal circumstances suddenly changed? Fact – you would be facing the same spiraling problem of accruing interest and no way of extending your time period.

Another way to consolidate your credit and store cards is simply to ask your family and friends for help. You will have to swallow your pride and embarrassment. However, family and friends have no service charges and don’t charge interest. They are much more likely to offer the lowest payment plans around. You are also definitely guaranteed to make your payments on time and talk to them if one month your finances are tighter than expected. They are much easier to negotiate with. but be wise and get everything in writing so that neither party can default on their agreement. Misunderstandings can happen. Hedge against them ahead of time.

Finally, you may wish to look into non-profit groups. They can renegotiate with your creditors to lower payments and help you avoid having to borrow money through loans or from other sources. Look at all the options now and decide what is best for you.

When it comes to investors, one thing is true; they all have to deal with brokers. It doesn’t matter if you are involved with penny stocks or looking towards long term stock options, you are going to have to associate yourself with a broker that fits your needs. The first time you enter the stock market, you will find that choosing a broker is the primary step towards investing. This is one of the most important things you will accomplish during this potential moneymaking process. Once you’ve begun your broker search, there are a few elements to take heed to.

In the beginning, full service was the only kind of broker you could choose from. High commission fees were commonplace, but there was an upside. You would receive tons of advice, as well as invaluable guidance when it came time to selecting an investment. As the end of the 70s rolled around, discount brokers emerged and investment possibilities flourished. In the past 10 years, online options have taken the public by storm. This gives investors more control over the way their stocks and funds are managed. For any case, proper research should be conducted to make the best decision.

When working with discount or online brokers, you will find that these sorts of brokerage firms really only take the orders pertaining to your investing desires. This is achieved through the Internet or over the phone. They will only provide assistance if you need help with the website. They will not tell you or give you hints on what stocks to choose or when to make a move. Third party stock research is often offered through these services. There are also a wide range of accounting tools that help you manage your investment, which are often provided through a download or can be easily accessed online.

Some investors lean towards a discount broker with the help of an assistance broker, who will provide a little bit of help, such as newsletters and additional research. Investors will still need to conduct the bulk of their research, but this option allows others to at least point you in the right direction.

If you go with the traditional approach and hire a full service broker, you will be able to receive stock suggestions and tips for boosting your portfolio. They will analyze your personal situation and assess your needs, which they will then draw up into an investing plan. This is a great choice for those that are pressed for time and want someone else to basically do all of the work (research). Filled with the latest news, full service brokers provide personal attention. You will be paying greatly for this luxury. Services like these do not come cheap.

For extra effort, you may choose a money manager (or financial advisor) over a full service broker. They will take a look at the overall scheme of your financial potential and future. They manage the stocks and bonds for their clients, as well as guide them through the ins and outs of financial planning. Flat fees are charged for the services they render and not for every transaction. They do not collect commissions; they instead, receive a certain percentage of your earnings through your portfolio. This means they will work extra hard for you because the more money you make also means more money for them.

Everyone make plans for leading a good life. You also would be planning for some investments, for buying some insurance, for investing in funds or unit trusts. Or, you might be planning to buy a house, or for financing the foreign education of your child. Retirement plan is one more issue which is necessary. It can be said that money management and financial plan is the core of our life. But to implement every plan is difficult. That is why people opt for financial planning services firms.

With over 30,000 financial products in the market, the selection of the optimum financial tools for you or your business is a highly difficult task. You can relieve this tension by choosing a financial planning services firm. These firms are composed of highly specialised wealth planners which can provide valuable advices. They are money managers, chartered accountants and market researchers who understand each nerve of a financial market. So they understand where to put money and in which form and how much. They also can suggest for how long you should invest and where you should never invest.

Since, these finance planners are professionals so it is always beneficial to go with their ideas. Generally, financial planning services firms provide efficient tools for managing the issues of various elements of your income and expenses. A financial plan works like a guide helping in managing your wealth and spending habits efficiently. It may include tax planning, insurance, budgeting, investment strategies and retirement and estate planning.

Also, a Financial Planning Services firm endeavours to coordinate each of your financial element to build, protect, and maximize your net worth. You can also seek advices regarding financial tools like funds, bonds, equities etc. They can help in growing your savings & investments in a tax efficient way. Therefore, make plans and don’t fear that it won’t get implemented. Choose efficient services of financial planning services firms and feel free to invest.