September, 2009 – Planning for Fiscal Health
By the Numbers
By Debbie Aria
Planning for Fiscal Health
Regardless of the current state of the economy, financial planning is always an important issue for businesses and individuals. Whether it’s time to maximize your income or time to cut back on expenditures, you’ll need a plan to make sure you are making the most of your money.
Financial planning takes a holistic approach, taking into account your current situation, needs (e.g. your assets, liabilities, income and expenditures), and your future objectives and life goals.
Your life goals could include buying a home, building an investment portfolio, saving for your children’s education, managing debt or planning for retirement.
A written financial plan is the beginning of managing your finances. It is achieved through a thorough analysis of your financial circumstances, and the development of a long-term financial planning strategy.
Setting goals is a significant component to any well thought out financial plan. When setting goals, be specific and realistic and, by all means, establish a time frame for achievement. Once goals are set the next step is to gather data.
With the proper data you can make sound decisions. Preparing accurate financial statements is the best place to begin. A good way to do this is to write everything down. Make a list of all income sources and all expenses. List all assets (investments, cash, real estate, insurance cash values). Don’t forget to make a list of all debt and current interest rates.
Once all the financial information is summarized, it’s time to create a plan of action. Written plans are a set of assessments about what to do, why to do it, what resources to involve, and how to do it. A well thought-out analysis of one’s current financial position can lead to proactive decision-making; take the initiative by acting rather than reacting to events.
Strategies may change depending on the current economic conditions, but with the proper tactics in place what could be rough ups and downs can be smoothed out to be more like ripples. No one wants to think about economizing, but sometimes that’s just what we need to do to get by. Consolidating debt, reevaluating expenses, and putting off non-necessities are just a few ways to streamline the cash flow in an economic downturn. When things are going well, it may be time to invest for those down times. By changing a few habits your personal financial status can remain relatively smooth over the course of a lifetime.
Remember that financial planning is not static. It is an ongoing process that is constantly being updated as your personal situation changes due to marriage or divorce, death, illness, birth of a child or other factors. For businesses, the plan changes as market conditions change, the business grows, a new product or service is launched, to gain a better focus of an existing business or a business is prepared to be sold.
If you need help with business planning or getting your family finances in order, call me for a consultation. I offer personalized service with integrity, objectivity, and professionalism.
Debbie Aria, CPA
About Debra Aria, CPA, PLLC Located at 79 Westbury Close, she has been in business for over 20 years and a Wellington resident for 16. She serves individuals and small businesses providing tax and accounting services together with elder and long-term care issues including Medicaid planning and asset preservation. She can be reached at 561-795-5516.