Financial Freedom

FINANCIAL PLAN CHECKLIST
PLANNING FOR EMERGENCIES

☐ Set aside 5–15% of your income to create a nest egg of 12 months’ salary to sustain you in the event
of job loss, accident, or illness.
☐ In the event of unexpected financial windfalls (bonuses, gifts, lottery winnings) put 50% of the after-
tax value in your emergency fund.
☐ If possible, get disability insurance (both short-term and long-term) to provide income should you
become incapacitated and unable to work.
☐ Purchase term life insurance to provide financial stability for your family in the event of your (or your
spouse’s) death. Ensure the policy provides enough to either replace your income or provide a
residence free and clear for your family.
☐ Designate a Power of Attorney for your financial decisions and a Health Care Proxy for healthcare
decisions in the event of a debilitating accident or illness.
DEBT REDUCTION
☐ Begin early tracking your income, budgeting, and designating an amount for your disposable income
to avoid excessive debt.
☐ Reach out to your creditors to negotiate the best possible interest rates and terms for your debt
repayment.
☐ To eliminate debt, begin paying off your highest interest rate credit card in full, then apply that card’s
payment to the payment on the next highest card, and so on. Over time, you will be applying a large
payment each month to your debt, eventually paying off all of your credit cards.
☐ Once your credit cards are paid off, do not close out credit cards as this can negatively affect your
credit score. Instead, pay down the accounts then use each card once every month or two, paying off
the balance in full immediately thereafter.
☐ Make credit cards less accessible by storing them in a safety deposit box or with a trusted family
member so they cannot be used for impulse purchases.
☐ Once you have paid off your consumer debt, begin applying the money you formerly paid servicing
that debt as a principal payment on your mortgage each month. This will allow you to build equity
and pay down your mortgage more quickly, saving you thousands in interest over the life of your
mortgage.
PLANNING FOR RETIREMENT

☐ Work with a fee-based financial planner and begin strategizing your long-term financial goals early in
your career to ensure that you stay on-track.
☐ Tax planning and retirement planning go hand-in-hand. Explore with your CPA or tax consultant how
you can shelter some of your income through retirement vehicles that help you save short term on
your income taxes and long term for retirement.
Page 1
☐ If your place of business offers matching for a retirement plan, make sure you max out your
contribution to take full advantage of this source of funding.
☐ If you change companies frequently, ensure that you properly roll over your retirement funds into a
centralized account to avoid losing track of multiple small accounts.
☐ Consider the type of lifestyle you wish to live in retirement and plan for it. If your retirement income
will be markedly less than your working income, what trade-offs will you make to ensure that you
will have a workable budget? If you will need to downsize your home or limit your activities
significantly, ensure that you are prepared for that shift.
ESTATE PLANNING
☐ Create a balance sheet and a record of all accounts, passwords, retirement savings, life insurance
policies, and other financial information and review with your spouse, child, or executor regularly.
☐ Create a will and ensure that you update it regularly to ensure it continues to reflect your wishes.
☐ If you wish to control the distribution of your assets upon your death, consider a trust that would
control the timing and manner in which assets are distributed to your beneficiaries.
OTHER FINANCIAL GOALS

☐ Begin a savings plan for your children’s education. Even if you do not currently have children, take
advantage of the power of compound interest by beginning a savings plan before children are born.
☐ If you need to pay off debt or are trying to beef up your emergency or retirement funds, consider
changes to your current lifestyle and surroundings that might help fund these goals.
• If you have a closet full of designer clothing, bags, and shoes, liquidate them and apply those
funds to your long-term goals.
• If you are overextended by living in a home that is too large or in an area that is exceptionally
expensive, consider how a move might improve both your short term and long term financial
picture.
☐ If you are living debt free, have planned well for emergencies, and have a firm handle on retirement
planning, you may have other financial goals in mind. Would you like to start a business? Travel the
world? Go back to school? Take a year off to paint or write a book? Consider the way smart financial
planning can help you accomplish any or all of these.
Page 2
THE GUIDE TO FINANCIAL FREEDOM
HOW TO ACHIEVE FINANCIAL FREEDOM?

What is financial freedom?
Financial freedom is mostly the objective of all working individuals. It means having enough savings,
investments and cash on hand to afford the kind of lifestyle we each desire for ourselves.
To become a financially free individual, you must pay off your debts, build a safety net of savings,
and create sufficient passive income through investments and business ownership to pay the current
and future living expenses and enjoy the time of your lives!
How to achieve financial freedom?
Step 1: BUILDING A STRONG FOUNDATION

Knowing your why is the important first step in figuring out how to achieve your goal. Your “why”
provides stability and clear path to the chaos of your financial well-being. Ask yourself why do you want
to become financially-free?
Then, begin early tracking your income, budgeting, and designating an amount for your disposable
income to avoid excessive debt. Create an emergency fund good for at least 3-6 months of your
calculated monthly living expenses to sustain you in the event of job loss, accident or illness.
Create savings fund and open it in a high yield account.
STEP 2: PROTECT YOURSELF AND YOUR LOVED ONES

It isn’t a smooth sailing journey to achieve financial freedom, create a safety net in protecting yourself
and your loved ones in case of permanent disability or premature death. Talk to a financial advisor to ask
for an assessment and a plan that is right for you and your family.
STEP 3: INVEST (CREATE A PASSIVE INCOME)

Historically, there can be no better way to increase your money than through investing. Once you have
secured your emergency fund and built enough capital you feel comfortable investing in, then you can
start your own business or you can look at all the possible investment tools in the market. Take advantage
of the power of compound interest, open an online brokerage account, create a manageable portfolio
and make weekly or monthly contributions to it automatically.
STEP 4: HANDLING YOUR WEALTH AND LEAVING YOUR LEGACY

Review, monitor and aide your investment portfolio when required. It is of the essence that you have to
continually update your financial plans as your life and goals change over time. After a lifetime of
managing your money, you didn’t want to end up your money in the pockets of people you didn’t intend
to. Create a will and update the beneficiaries. Beyond that, regardless of your income, you’ll want to
maintain adequate life insurance to support your loved ones in the event you die unexpectedly.
Page 3
Achieving financial freedom can be very difficult especially when you are faced with growing debt, cash
emergencies and medical emergencies but it can be possible when you have discipline and careful
planning. When you don’t need to work for money anymore, you’ll know you’ve made it to financial
freedom.
Page 4

Financial Freedom

Uploaded by

Copyright:

Available Formats

Financial Freedom

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Financial Freedom

Uploaded by

Copyright:

Available Formats

FINANCIAL PLAN CHECKLIST

PLANNING FOR EMERGENCIES

PLANNING FOR RETIREMENT

OTHER FINANCIAL GOALS

HOW TO ACHIEVE FINANCIAL FREEDOM?

How to achieve financial freedom?

Step 1: BUILDING A STRONG FOUNDATION

STEP 2: PROTECT YOURSELF AND YOUR LOVED ONES

STEP 3: INVEST (CREATE A PASSIVE INCOME)

STEP 4: HANDLING YOUR WEALTH AND LEAVING YOUR LEGACY

You might also like