Financial Planning and Budgeting Assessment

A financial assessment is a set of questions to help you determine whether you’re financially on track to reach your future monetary goals. Taking a financial assessment will help you understand your current situation and where you want to be in the future.

Financial Planning and Budgeting Assessment

Take this financial planning questionnaire and budgeting assessment to get your financial goals on track.

Fifty is the new forty and sixty is the new fifty. It is true—many people are living longer, which means it is more crucial than ever before to start strategically and financially planning and budget your finances to enjoy and take advantage of your golden years.

What’s your financial planning snapshot?

Financial planning involves determining your short- and long-term financial objectives, as well as devising a comprehensive strategy to accomplish them, this can often include seeing a financial advisor who is actively a part of your financial planning process. While you may feel healthy and fit at age fifty, there is a distinct difference between the decades in terms of financial and retirement planning. Time plays a big role in growing your assets and as you approach retirement years, you need to deliberately forecast your fiscal situation and determine whether you have enough for life after work.

Taking the time to take a financial snapshot and budgeting your financial life will give you a necessary glimpse of your current ‘big picture’ finances. Financial awareness helps you clarify your goals and can re-energize your focus on planning for your future.

Track your finances and annual budget to forecast your future

You work hard your entire life so you should be able to enjoy your retirement years. It’s important to remember that you won’t be able to do this unless you have the money you need to not only maintain your lifestyle, but also splurge on entertainment, travels and socialization with friends and family.

The challenge with the retirement and financial planning process is that it’s a long-term goal. In order to achieve the magic of compound interest you need to invest and strategically grow your net worth years in advance. Budgeting to afford your lifestyle and having enough money leftover to invest is all part of this strategic planning.

Take our financial goals assessment questionnaire to help you figure out your top retirement goals. Here are some common goals for people who are 50+:

Maintain or improve lifestyle

It’s only natural to strive to improve your lifestyle as you have more time to do the things you love. In order to do this, you’ll need to maintain or grow your investment portfolio as well as increase income to offset inflation.

Prevent running out of money

No one wants to run out of money, which is why this is a top goal for many. Having to continue to work past normal retirement age, rely on children for help or go back to work is a main source of anxiety for people age fifty and above. Smart investments, which often require more than low-volatility investments, such as Treasury bonds, can help provide you with enough cash flow during your retirement years.

Increase wealth

Some people wish to grow their assets and wealth over the long term, often for their retirement enjoyment and/or legacy. This goal requires a growth-oriented approach.

Follow these steps to set your financial goals on your own or with a financial planner.

1. Identify and list your most important financial goals
2. Assign each goal a timeframe
3. Short-term: 0 to 3 years
4. Medium-term: 3 to 10 years
5. Long-term: 10+ years
6. Calculate the cost of each goal
7. Use today’s costs for short-term goals
8. Use a retirement calculator for medium- and long-term goals

What is your average daily, monthly and yearly spend?

Once you have set your goals, you’ll need to figure out your annual budget, where you cash flows, and discretionary and non-discretionary spend, or the necessary and more frivolous expenses in your life on a daily, monthly and yearly basis.

Print this page and fill out the sections below to help you track your expenses and calculate your net worth:

Assets (What You Own)

Cash:

• Cash on Hand _________
• Checking Account _________
• Savings Accounts _________
• Money Market Funds _________
• Cash Value of Life Insurance _________
• Other _________

Real Estate/Property:

• Home _________
• Land _________
• Other _________

Investments: (Market Value)

• Certificates of Deposit _________
• Stocks _________
• Bonds _________
• Mutual Funds _________
• Annuities _________
• IRAs _________
• 401(k),403(b), 457 Plans _________
• Pension Plan _________
• Other _________

Personal Property: (Present Value)

• Automobiles _________
• Recreational Vehicle/Boat _________
• Home Furnishings _________
• Appliances and Furniture _________
• Collections _________
• Jewelry and Furs _________
• Other _________

Total Assets _____________________

Liabilities (What You Owe)

Current Debts:

• Household _________
• Medical _________
• Credit Cards _________
• Department Store Cards _________
• Back Taxes _________
• Legal _________
• Other _________

Mortgages:

• Home _________
• Land _________
• Other _________

Loans:

• Bank/Finance Company _________
• Bank/Finance Company _________
• Automobile _________
• Recreational Vehicle/Boat _________
• Education _________
• Life Insurance _________
• Personal (from family or friends) _________
• Other _________

Total Liabilities _____________________

Total Assets Minus Total Liabilities = Net Worth

What’s your cash flow?

Now that you have your goals and your net worth, you need to figure out your cash flow. Calculating your monthly cash budget and flow will help you evaluate your present financial status and determine how much you have available to invest.

Here are the steps:

Add up your monthly net income – How much money do you take home each month after taxes? This includes salary and other steady and reliable sources of income, such as:

• Income from a second job
• Child support or alimony
• Social security

Calculate your average monthly expenses – What are your expenses each month? Here are some monthly expenses to consider:

• Mortgage or Rent
• Car lease or loan
• Personal loan
• Credit card, alimony or child support payments
• Groceries
• Utilities
• Transportation
• Insurance
• Hobbies
• Luxuries
• Gifts

Subtract your monthly expense figure from your monthly net income to determine your leftover cash flow.

• If you have a “negative” cash flow, you’ll need to look for ways to cut back on your expenses before investing.
• If you have a “neutral” or “barely positive” cash flow, which means your spending nearly equals your cash flow, look for expenses you could eliminate or reduce. A financial planner can help you assess your financials for ways to save on your expenses.
• If you have “positive” cash flow, you have some leftover cash after your expenses each month.

Be Prepared for Your Future

Savvy financial planning and taking measures to prevent financial mistakes will help you develop a financial portfolio that will greatly influence your quality of life and financial success. The first step in for successful financial planning is to meet with a financial advisor.

Consider contacting a financial advisor to discuss ways to help you get organized with your finances, save on your expenses, invest extra funds and grow your assets to maximize your financial return. You'll be able to get a good grasp of your financial goals, optimized financial planning, tax planning, retirement planning, education savings, and other situations such as student loans, car loans, emergency funds, and other personal circumstances.