How to make a financial plan.

Creating a financial plan can seem like a daunting task, but the reality is it’s easy once you know the steps.

In this post, we are going to create a sample financial plan to show you how simple it can be.

Step 1. Set a goal

Our goal is to become financially independent and build generational wealth. To do this we’ve set a goal of: $5 million dollars in net worth and would like to retire in 25 years.

Step 2. Figure out your budget

We are going to use the 50/30/20 budgeting technique.

Step 3. Build an emergency savings

Our monthly after tax income is $6,000.00. We are setting a goal of $12,000.00 for our emergency savings and we hope to reach that goal in 15-18 months. We are going to hold the funds in a high yield savings account.

Step 4. Insure your financial future

We have life and health insurance through our employers. Our auto insurance is accounted for in our budget. We rent our home and have renters insurance which is associated with our auto insurance policy. We will compare rates for disability insurance and plan to obtain a policy in the next 4 weeks.

Step 5. Debt pay down and fund your investments

Our current student loan balance is $45,000.00. We will pay an additional $50.00 per month to help pay down the balance.

We will contribute 4% ($4000.00) of our pretax salary to our employer sponsored plans, as this is the maximum matching rate provided. Once our emergency savings is funded, we will re-evaluate and pay additional money on our student loans.

Now, you see how simple that was? Try creating a financial plan, we promise it won’t be as difficult as it seems

As always if you have questions or concerns regarding creating an emergency fund, investing, real estate, insurance, or planning for the future, don’t be afraid to speak with qualified financial advisor. Smart Asset has a great tool to find an advisor in your area or feel free to email me (contact@surgifi.com) to help you on your path to financial independence.