How to Make Keeping Track of Your Finances Easy

How to Make Keeping Track of Your Finances Easy

September 15, 2023

Now is an excellent time to start evaluating your current financial situation, determining your future goals and expectations, and working toward pursuing them. If you need help pulling together a plan for your finances, a financial professional can explain how you can work together to identify strategies to help you work toward financial independence.

Making a plan for your finances may give you the confidence to stay on track to work toward your goals. Staying prepared occurs over time and throughout your life because your goals are unique and can change due to circumstances. Here are a few things that your financial professional and you can work together to address:

  • Examining your short and long-term financial goals and creating a strategy to reach them.
  • Calculating your current net worth and cash flow.
  • Analyzing your personal and family situations,
  • Assessing your portfolio's risk tolerance
  • Listing your future expectations.
  • Creating your personalized, comprehensive financial strategy.

Some of the factors your financial professional will consider include your marital status, types of assets, amount of income, health, risk factors, employee benefits, number of children, and your desired retirement income. You may also include planning for other goals such as education and wealth transfer to heirs or a vacation home.

Preparing can help make your first and future meetings with a financial professional go smoothly. Here are some things you can do before the initial meeting so you are ready:

Think about your goals. Envision what you want from your life, your investment and retirement goals, and the timeline for reaching them. Write out your short-term goals (two to three years) and long-term goals over several years, and share them with your financial professional, who will help you track your progress over time.

Understand your money in and money out. Understanding what money comes in and where it goes each month is essential to staying on top of your finances. Here are some things that can help you keep track of your money goes:

  • Implement a 'pay yourself first strategy' - Automate your retirement savings contributions to help save for your retirement
  • Create a monthly budget - Work toward spending less and saving for future goals by monitoring spending.
  • Use online tools - Budgeting and other financial tools from your financial institution and investment custodians can help you sync your financial information and track your money.
  • Review your income and paycheck deductions - To help understand your financial situation, review all sources of income. Next, determine what remains after 401(k), Roth IRA, or other retirement savings, health insurance, and other employer-sponsored benefits are deducted from your paycheck.
  • Determine your net income - Your net income is the money left each month after everything is paid that can be saved and invested for your future goals.

Gather your financial information. Collect and organize all of your financial information before your first meeting. Here is what your financial professional may want to review:

  • Life insurance policies
  • Investment statements
  • Bank account statements
  • Other insurance policies, such as homeowners, car insurance
  • Health insurance information

Your financial professional will use this information to create a financial strategy. They may also ask you for additional information or to complete specific tasks. The more open you are to sharing your financial and personal situation, the more your financial strategy can be helpful. Remember that it's ok to ask questions of your financial professional throughout the process so that you feel confident in their recommendations.


Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by Fresh Finance.

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