Skip to main content

October is National Financial Planning Month, making it the perfect time to focus on financial planning. A financial plan can be one of the most important tools in your long-term financial strategy, so it’s not surprising that you should keep it up-to-date regularly as your life changes—whether that means getting married or divorced, having children, changing jobs, moving homes, or retiring. Of course, you may wonder what a financial plan is and why you need one. Here are some answers:

The Importance of Having a Financial Plan

A financial plan will help you feel more confident about your finances and avoid a lot of worries. It can also lead to a better sense of peace because it can reduce uncertainty in the future. A financial plan helps you focus on what’s essential while avoiding behaviors that could hinder your savings goal. It will allow you to save for the things that are most important to you.

The Components of a Good Financial Plan

A good financial plan will help you identify where you are, your goals, how much you can afford to save, how much debt you have, and how the different aspects of your life (work, family) fit together. The components of a good plan include:

  • A cash flow analysis (to understand where money is coming in and going out).
  • An understanding of risk tolerance (to determine which investment vehicles are suitable for you).
  • Projections to know if your savings will be enough when the time comes.

How to Make a Budget Step by Step Based on Your Income and Expenses

Now that you know what a financial plan is and why you need one, it’s time to create your own! The first step in creating your financial plan is determining where your money comes from and goes. To do this, start by writing down all the different sources of income and the related expenses for each. These will be the raws in your budget. If you are self-employed or have irregular payments, don’t worry! There are still ways to create an accurate budget. 

First, create monthly totals based on your average monthly earnings for the year (or three months). From there, use those totals as estimates for the current month so you can stay on track with tracking how much income and how much expense has been incurred. Make adjustments when they happen, so you can always see how close you are to meeting your goals. Next, list all your fixed expenses (i.e., bills you pay every month). Fixed bills include car insurance, mortgage payments, gas/electricity/water bills, etc. Next are the variable costs (which change depending on what happens during a given month). Variable costs include things like food and entertainment budgets.

How to Do a Personal Financial Check-Up and Tune Up

A personal financial check-up is reviewing your current finances to see where you are at, what you want to do next, and how much you need to save to reach those goals. When conducting a financial plan check-up, there are two main steps to go through when conducting a financial check-up: 

  • Conducting a financial check-up
  • How to do a personal financial tune-up

A personal financial tune-up is an annual review of all aspects of your money. It typically includes updating beneficiaries, adjusting retirement contributions, assessing home insurance rates, and reviewing beneficiary designations on bank accounts. A tune-up also allows for planning for long-term care needs if you have a long-term care policy or are considering one. 

Reviewing health insurance options can be done since some plans provide benefits such as out-of-network and prescription drug coverage that may be worth exploring. The bottom line with a financial tune-up is that it’s like going to the mechanic—you’re checking under the hood before getting back on the road.


October is National Financial Planning Month, so now’s the perfect time to start planning your finances. Having a financial plan has many benefits, including peace of mind in knowing that you’re doing what’s best for you and your family. Although there are many factors to consider when developing your plan, having this important tool in place is well worth the effort.

Roberts Tax and Retirement Planning work with people to help them achieve their financial goals. From retirement planning and income tax to accounting and taxes, we can help you achieve your financial future. We offer free consultations, so give us a call today!