Personal Financial Planning Example

Financial Planning Example: The Situation

Conor's situation for this financial planning example is: He just finished his DPT, makes $75K/yr, has $100k in loans, getting married and wants a home with three kids.

The Mistake Most People Immediately Make

Connor's loan servicer recommended REPAYE, his financial planner didn't know about loans and suggested REPAYE, and to speak to a broker for a $650K mortgage, all for a $2,100 fee for the financial plan.

What Would Happen With This Plan Is Frightening

Had he followed his financial planner's advice, he would have found himself in financial ruin in 15-20 years at age 45-50. He and his fiancé would have to work for life.

Step 1: Setting Up Your Financial Plan

To set up your financial plan you will need to know your goals, organize your budget, fund your future goals, manage risk, and know your emergency fund goal.

Step 2: Simulate The Results

The key here is to evaluate if your financial plan allows you to meet both your long-term and short-term goals.  If your plan does, then all you have to do is implement your plan.

Financial Planning Simulation Results

Conor was able to see how to pay off his loans in 3 years, save for a wedding, buy a house, have 3 kids, and his wife would be able to stay home if she wanted to! By implementing the plan they would have $2.9 and $3.6 million dollars by retirement!

Step 3: Implement Your Plan

There are two keys to implementing your financial plan: make it easy to implement, and avoid making the mistakes of many people; having life style creep.

Conor had about 30% of his total income going to future goals.  He had about 50% going to day-to-day money. Your biggest financial goal is to switch that.

Step 3: Implement Your Plan Results

Last Word

If you'd like help be sure to become a FitBUX member and use our new financial planning technology.  You can do all these steps and sleep easy at night knowing you are going in the right direction.

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