Page 9 - JanuaryFebruary25 CBA Report

Bringing Your Financial Plan to Life
While financial wellness is about understanding your motivations, behaviors, and goals, financial planning is more tactical. It’s a
common misconception that financial planning is the same as investment management. In reality, financial planning is an ongoing
process that analyzes your entire financial picture—from cash flow needs to retirement plans to debt management—and creates prac-
tical steps to achieve your goals. Think of financial planning as a roadmap: it helps you identify where you are, where you want to go,
and the best way to get there.
After you’ve spent some time clarifying your goals and priorities, it’s time to get moving. Below are outlined a few core financial
strategies you should explore and implement as you plan for your financial future.
1.
PLANNING YOUR CASH FLOW
Cash flow is your financial lifeblood. To create a successful
(and realistic) financial plan, start by evaluating your cash flow
and spending habits:
4.
CHOOSING A SAVINGS VEHICLE
Different accounts, such as savings, investment, and retire-
ment accounts, offer unique benefits like interest growth, tax
advantages, and liquidity, helping you maximize your financial
potential:
•
Track your income and expenses: Use apps like Mint or
YNAB or keep a spending journal for 30 days to uncover
patterns and unnecessary expenditures.
•
Traditional Retirement Accounts: Pre-tax contributions
lower taxable income now, but withdrawals are taxed later.
•
Categorize expenses: Identify essential or non-discre-
tionary (housing, utilities) vs. discretionary (dining out,
hobbies) expenses, and set limits for each category.
•
Roth Accounts: Post-tax contributions grow tax-free.
•
High-Yield Savings Accounts: Ideal for short- or medi-
um-term goals.
2.
PRIORITIZING YOUR SAVINGS
Saving isn’t just about hoarding money—it’s about inten-
tional planning. Break your savings into buckets and prioritize
them:
•
•
•
•
•
•
Emergency Fund: Save 3–6 months of expenses for unex-
pected events.
Employer Matching: Contribute enough to your employer’s
401(k) to capture full matching benefits.
High-Interest Debt: Pay down credit cards and other
high-interest loans.
Retirement Savings: Aim to maximize annual contribu-
tion limits.
Short-Term Goals: Save for milestones like a home down
payment or new car.
Long-Term Goals: Invest for education, travel, or future
aspirations.
Pro Tip: Automate your savings to ensure consistency!
CREATING A NET WORTH STATEMENT
5.
A net worth statement gives a snapshot of your financial
health by comparing what you own (assets) to what you owe
(liabilities). To create one:
•
List all assets (cash, investments, property).
•
Subtract liabilities (loans, credit cards).
•
Review quarterly to track progress.
Pro Tip: Schedule a quarterly “money date” to update your net
worth and assess your goals.
One Step At a Time
Financial wellness is a journey, not a destination. No matter
where you are in life or your career, managing your money can
feel like an uphill battle—but it doesn’t have to be. When you
start by building a solid foundation on the three pillars of finan-
cial wellness, you’re able to create a tailored plan that works for
your unique needs.
3.
MANAGING YOUR DEBT
Managing debt is critical to maintaining financial stability.
Additionally, proper debt management can help protect your
credit score. While this can feel like a barrier to financial success,
it’s manageable with the right approach:
•
List all debts by interest rate and balance.
•
Prioritize paying off high-interest debts first.
•
Consider the “snowball method” for momentum:
pay off smaller balances first.
Michelle Stevens believes that good financial planning is an essential part of life, but
that it should be easy to understand. As a member of the financial planning team at
Truepoint Wealth Counsel, she guides clients through the planning process and helps
integrate ideas for success. She applies a holistic approach, incorporating the many
facets of financial planning that include retirement planning, education analysis,
insurance reviews, and stock option monitoring.
Disclaimer: Truepoint Wealth Counsel is a fee-only Registered Investment Adviser
(RIA). Registration as an adviser does not connote a specific level of skill or training
nor an endorsement by the SEC. More detail, including forms ADV Part 2A &
Form CRS filed with the SEC, can be found at TruepointWealth.com. Neither
the information, nor any opinion expressed, is to be construed as personalized
investment, tax or legal advice. The accuracy and completeness of information
presented from third-party sources cannot be guaranteed.
THE REPORT | January/February 2025 | CincyBar.org 9