Building a Personal Financial Plan for Long-Term Success

Personal Financial Planners in Maryland, Virginia & Washington, D.C.

We plan many things in our lives: weddings, vacations, education. The most important planning we do, however, is financial planning. We need a solid personal financial plan to support all those other things.
A solid financial plan helps people manage all aspects of their finances, including income, expenses, spending, savings, investments, and retirement planning. Here are the fundamental steps to building a personal financial plan.

  • Set clear financial goals.
    Consider both short-term and long-term financial goals. In the short term, you might be considering a down payment on a house, sending children to college, or paying off a car loan. In the long term, you might be eyeing a move to another city or preparing for retirement.
  • Assess your current finances.
    Collect information on your current finances including income, expenses, spending, and assets and liabilities. You need an overall picture of your financial situation to move forward.
  • Create a budget.
    A budget is a plan that outlines your income and spending to ensure your needs will be met and your bills will be paid. A budget will cover housing, utilities, groceries, transportation, and insurance. 
  • Build an emergency fund.
    Be sure also to set money aside each month for a rainy day—all the planning in the world won’t prevent unexpected expenses, from medical bills to paying for expensive car repairs.
  • Plan for taxes.
    People can save huge amounts of money over their lifetime through tax planning. Make sure you’re taking all possible income tax credits and deductions and making use of tax-advantaged accounts such as IRAs and 401(k)s.
  • Manage debt.
    Find ways to consolidate debt, lowering overall interest rates and/or paying debt off faster. For instance, if you have a good credit rating, banks may offer balance transfers at zero percent APR for a year or more. But do the math first: some charge a fee that makes the balance transfer more expensive than it appears.
  • Plan for retirement.
    The fact is, it’s never too early to prepare for retirement. Start when in your thirties—or earlier—and by the time you’re in your fifties, you’ll be in a comfortable position.
  • Consult a financial advisor.
    Working with a professional financial advisor ensures your financial plan is covering all the bases and doing so according to best practices. At the same time, you’ll learn tricks and strategies for investment, debt management, and tax planning.

Building a comprehensive financial plan empowers you in all aspects of your life. When you put yourself on sound financial footing, all that other planning in life—like weddings, buying a home, and taking a dream vacation—becomes enjoyable instead of scary.

Our Financial Planning Process

Our personal financial planning process is designed to let us get to know each other. We believe the success of a financial plan is built on a foundation of trust between a client and their financial advisor. That’s why we strive to learn everything about your current financial situation, your financial goals, and even some things you may not think are relevant but can greatly influence how you make financial decisions—such as your beliefs, attitudes, and values.

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Key financial planning tools

Let technology make your financial planning both easier and more powerful. These financial planning tools help you gain a deeper picture of your financial condition.

Required Minimum Distribution Calculators

Required minimum distributions (RMDs) are minimum amounts the IRS requires retirees to withdraw from retirement accounts such as IRAs each year. You can find a free required minimum distribution calculator here .

Emergency Fund Calculators

An emergency fund will cushion you against surprise financial setbacks. These include car repairs, medical expenses, or a job loss. Each individual’s needs are different, so an emergency fund calculator can be extremely helpful in making sure you’re covered for the unexpected. Nerdwallet has a free one available here .

Net Worth Assessment

Your net worth is the value of your assets minus the value of your liabilities. If your debts are larger than what you own, you have a negative net worth. Calculating your net worth gives you a valuable report card on your financial situation. Forbes put together a useful net worth calculator here .

Investment Risk Tolerance Assessment

Investors have different goals and different possibilities in terms of their assets and how much risk they are willing to accept. Risk tolerance is the degree of market volatility and loss an investor is willing to accept. The University of Missouri website has a useful risk tolerance quiz that can help you find your sweet spot in investing.

Compound Interest and Savings Goal Tracking

Saving money isn’t as easy as just putting it into a savings account. Make sure your savings are growing as fast as possible and track your savings goal with compound interest and savings goal calculators like this free one made available from the SEC.

Social Security Retirement Estimator

Understanding the best time to turn on Social Security benefits is essential in getting the most out of your Social Security. Remember, beginning benefits early lowers the monthly benefit amount while delaying retirement past your full retirement age increases the amount. This SEC website offers a free personalized Social Security benefit estimator.

529 College Savings Planner

It practically takes a college degree just to plan for college tuition and expenses. Use this 529 Expense Analyzer to assess how fees and expenses can affect the return you receive on various 529 college savings plans.

Long-Term Care Cost Calculator

As people are living longer, the need to prepare for long-term care has increased. Long-term care may consist of home care provided by family and friends, or when intense care is required, it may be provided in a nursing home or memory care community, which can run thousands of dollars per month.

Use this long-term care calculator from AARP to learn more and plan for your family’s future

Personal Financial Planning Case Study

Stan and Kara were a married couple in their late fifties who hoped to retire within the next five years. They owned a home with about 80 percent of the mortgage paid off, had two cars that they owned outright, and had no other debt. In retirement, they hoped to be able to travel and visit their grandchildren who lived in three different cities. Both had 401(k)s through their employers and they had some limited stock investment.


Our challenges included:

  • Preparing for an annual income of $100,000 per year, which we determined was sufficient for the standard of living in Stan and Kara’s metropolitan area and their planned travels.
  • Helping Stan and Kara understand their options regarding retirement income.
  • Assessing their overall financial situation to develop a strategy for when to begin Social Security payments.
  • Showing them how much of an inheritance they would likely be able to leave for their children.

Our process

In building a new financial plan for Stan and Kara, we:

  • Complied a post-retirement financial plan and budgets to illustrate what Stan and Kara were working toward and how stable their ability to retire is.
  • Explained their options for retirement income based on their current assets and age.
  • Made an investment strategy to produce their needed post-retirement income, a plan that included stock and mutual fund purchases. 
  • A major goal of the plan was tax efficiency. This meant incorporating a multi-year roth conversion strategy and 
  • Recommended working with a local attorney to set up trusts and planned inheritance options that could reduce the inheritance tax as their estate passed on to their children.


The only thing you can plan for with certainty is that situations change and you’ll probably need to re-plan. We continued to meet with Stan and Kara regularly for annual reviews of their progress and reassessment of their financial situation. That became essential in 2017 and again in 2020 when Congress made substantial changes in the US tax code.

Stan and Kara were able to retire comfortably on schedule and pursue their travel plans. We still meet periodically to make sure their plan is on track and to discuss and execute ongoing tax planning and investment strategies.

If you’re ready to begin taking the steps you need to achieve financial success, then give us a call. We look forward to hearing from you.

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