March 8th, 2009 by Hank Brock

The financial planning process involves five basic steps. After the initial meeting with your financial planner, the five steps to the financial planning process include: data gathering, plan preparation, plan presentation, plan implementation, and on-going monitoring.

1. Financial Planning Process: Data gathering.

Data gathering is a marathon. It usually takes place at your home. It may take two hours or all day. Your planner will need to examine all your documents: Tax returns. Balance sheets. Income statements. Employee benefit plan booklets. Retirement plan documents. Wills. Trusts. Insurance policies. Investment statements. Brokerage house statements. Bank statements. These are the tangible bits of information.

These physical documents are not all that your planner will need to get from this data gathering session. There is also subjective information that the planner must determine. What are your lifestyle goals? Where do you hope to be in the future? When do you plan to retire, and what are your expectations for that time period? Assumptions of the future must also be established. Your attitudes regarding interest rates, inflation, the economy, and various other factors must be clearly established.

Finally, your financial planner will determine your personal attitudes – toward taxes, risk tolerance, complexity/simplicity of your financial affairs. The primary objective of the data gather is to have a clear idea of where you are currently and where you want to head for the future.

2. Financial Planning Process: Plan preparation.

Preparing your plan typically takes three to four weeks, as the planner does an analysis — the diagnostic work. The planner knows where you are, and where you want to be. Now they need to figure out the most efficient way to get you there.

For example, maybe it’s a family partnership. Or a family corporation. Or a family trust. They’ll look at all the pros and cons — then prepare written recommendations. Some will be major strategic recommendations. Others will be minor tactical recommendations. They will all fit together.

3. Financial Planning Process: Plan presentation.

Once your plan is prepared, your planner will schedule time to present their findings to you. During this first meeting, he’ll present the plan to you and review any major points. You’ll then take the plan home to read and study. It is important that you sit down with your spouse (if applicable) and fully examine the plan. Write down any questions that you have regarding it.

When you get back together with your planner, you’ll go over the plan in detail. They’ll answer your questions. Clarify details. As you agree on each recommendation, your planner will prioritize them into an “Implementation Check List.” It’s simply a “To Do” list for you and your planner.

4. Financial Planning Process: Plan implementation.

The first three steps will likely be completed in about a month’s time.

The fourth step, plan implementation, takes on average five to six months (sometimes longer). During this time, you will cover topics such as tax planning, retirement planning, estate planning, and other insurance concerns. Your financial planner may want to bring in other experts at this time to consult on specific issues.

When all is said and done, you may have as many as 30 different recommendations in your plan. Some will be major, broad, strategic recommendations, likely worth thousands of dollars to you. The rest will be to help you fine-tune your financial affairs. These things will help you cross the T’s, dot the I’s, and ensure your finances are really in order.

5. Financial Planning Process: On-going monitoring and maintenance.

In the final step of the financial planning process, your planner should be retained to help provide periodic updates and on-going advice. You should do a couple of tax planning meetings each year, review your portfolio, update insurance, etc… You’ll often find little questions that you’ll want to run past your advisor. Because your planner knows your unique situation, you will be alerted to changes in conditions that directly affect your plan.

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March 7th, 2009 by Peter de Vizard

If you have large credit card debt, as so many people do, you should know that the longer you carry a balance from month to month, the more you will end up paying off, and the more troubled your financial outlook will become.

For some, it may seem impossible to get rid of the debt, but if you go about it the right way, you can get rid of it once and for all.

The first thing you have to do is decide that you really going to make an effort to change, regardless of how difficult it may seem. Once you set your mind to being credit card free, you will have the determination needed to get yourself out of this debt quagmire. It will take time, persistence and control plus an understanding that it wont an “instant fix”

Once you have made your decision to get rid of your credit card debt, the first thing you should do close your open cards, so you aren’t tempted to use them, thus accumulating even more debt. Even using your credit card to pay for a $3.00 meal at lunch can end up costing you ten times that much in interest.

It’s better to get rid of those cards, and resist that temptation for good. Shred the cards up, or put them somewhere in the house where you can’t get them easily. Maybe only in use of emergency, and the craving for a Starbucks Frappachino is not an emergency!

When you get your monthly credit card statements, aim to pay at least twice the minimum payment due on each card, more if you can squeeze it into your budget, The faster the amount owed goes down, the less you pay in interest per month.

Credit card lenders make their money off of interest and other fees they charge, so you have to really work at those balances, even if it means doing without something to make a larger payment. You may not see a significant difference at first, but with several payments that are on time and considerably more than what is due, you will start to see those balances come down.

Once you get used to paying more than the minimum payments due, you should take the time to compare the interest rates on all of your cards, and push all the extra money you can into the card that has the highest rate. When that balance is paid in full, divert that money to the card with the next highest rate, and so on, until you are clean of all the debt..

It’s a long-shot, but some of the larger credit card lenders do have programs that can help cardholders payoff their accounts at a reduced rate. Just read the fine print, follow the terms closely, because in most cases, if you make one late payment, you are dropped from the program. All the interest and fees resume on the account. If that happens, you will quickly lose any ground that you may have gained.

By making the decision to get rid of your credit card debt, and working towards your goals, you can see the light at the end of the debt tunnel; it just may take you some time to reach it! You can do it if remain committed, put the effort in and have your family and friends on board. Try to imagine how it feel to be free of the pain once you have got rid of your credit card debt.

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