Financial planning involves 6 steps: identifying goals, collecting financial data, developing a plan, setting current, mid-term, and long-term goals, implementing the plan, and monitoring progress. A financial planner helps clients organize finances, project savings and investments, and make efficient decisions to meet goals. The financial pyramid prioritizes needs - the base includes insurance, obligations, and an emergency fund, while the peak allows for discretionary spending like travel after debts are paid off and retirement is funded. Setting specific, realistic short-term, mid-term, and long-term goals and understanding one's current financial status and budget are important for creating an effective financial plan.

1. FINANCIAL
PLANNING
BY: MANNY DAVIS

2. WHAT EXACTLY IS FINANCIAL
PLANNING???
Financial planning might sound like something
only the very rich can afford. but most of us
do some sort of financial planning. If you’ve
ever scrambled to make ends meet before
payday, that’s an extreme form of financial
planning.
Financial Planning, in short, is a way of
planning for and budgeting your current
assets against your long-term goals. It can be
broken down into 6 steps…
1. Identify your goal
2. Collect your financial data
3. Put it together
4. Develop current, mid-term, and long-term
goals
5. Put that plan into action
6. Monitor and update in response to
personal life

3. WHAT DOES A FINANCIAL PLANNER
DO?
• A financial planner helps you organize your
finances and projects the results of your savings
and investments so you can see how well
prepared you are for retirement.
• They also help you make decisions with your
money that will help you reach
your financial goals as efficiently as possible.
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4. THE FINANCIAL
PYRAMID
• The Financial Pyramid is pretty
much a financial version of
Maslow’s hierarchy of needs.
The concept of a financial
pyramid can not only help you
prioritize financial goals, but it
also can make sure you aren’t
exposed to unnecessary risks.

5. DISSECTINGTHE
PYRAMID
• Stage 1 of the Pyramid is often over looked
but it serves a very critical role. It includes
things like:
• Insurance
• Will and Power of Attorney
• Meeting monthly Obligations
• For many people this stage is either very
small or non existent. This is the biggest
part of the pyramid so having to small of a
base can put your entire pyramid at risk
• Look at the base as your financial cushion
in case of an emergency and without that
cushion your be jeopardizing your long-
term financial goals.

6. DISSECTINGTHE
PYRAMID PT2
• Stage 2 of the Pyramid is somewhat of a
financial euphoric area. At this stage, you
might be settled into family life, with a home
and a career that’s well established. Ideally,
you’ve racked up a few raises and promotions
over the years and are comfortably paying
your monthly bills and saving for retirement.
• If so, then you may want to focus on putting
your extra savings toward your children’s
college fund. You might also have aging
parents who need financial assistance.
• With your own retirement becoming more of
a reality than an abstract concept, you may
want to focus on maximizing your retirement
savings, which includes making catch-up
contributions if you’re eligible.
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7. DISSECTINGTHE
PYRAMID PT3
• Notice the peak is the smallest portion
of your pyramid. That’s because at this
point you should have low or zero debt,
and you have enough funds saved up to
spend.
• As a general rule there should be a
maximum of 5% on your assets saved.
• Theoretically the peak is where you can
relax and enjoy life. Your children are
grown and your mortgage is paid of so
you should have disposal income to..
• Vacation
• Travel
• Donate to Charity

8. SETTING FINANCIAL
GOALS
8
1. Set VERY SPECIFIC goals:
Visual and write down your goals. However, don’t forget to be
realistic
2. Set Goals
Short-term: These are goals you want achieved
within a year.
Medium Term: These are goals you want to achieve
within 3 years.
Long-term: These are goals you want to achieve
behind 5 years.

9. SETTING FINANCIAL
GOALS
9
3. Understanding of current Financial Status
In order to plan future plans you must first
understand your current financial status. In
order to do this you must calculate your Net
Income.
Budgeting
When you understand where you stand
financially you can budget more
efficiently. Keeping tract of your
spending habits will help reduce your
unnecessary spending
Net Income = Assets – Liabilities

10. SETTING FINANCIAL
GOALS
10
4. Plan for each Financial Goal
Without the other steps it would be impossible to make a
financial plan. Now that you know how much money you
have to work with you can start allocating.
Insurance
Remember that Insurance is at the base
of your financial pyramid. That means if
your not protected in all areas; life,
disability, accidental, hospitalization,
and critical illness, then your entire
financial plan will fail.

11. 11
Emergency Fund
Debt Reduction Planning
Investment Planning
This one is obvious. The idea is have money
saved up for emergencies. An ideal emergency
fund contains about 3 months worth of savings.
You need to transfer your high interest loan
balance to low interest loan. This this reduce
your EMI amount. Which by in turn increases
your Net Income and cuts back on one more
expense.
The purpose of investing is have
ensure person disposable
income during retirement, save
for your child’s education,
security, and even taking a much
need vacation.

12. Financial Planning is
an endless cycle, but
with the right help
you can be
prosperous
Don’t let
another day
go by
without
having
financial
security for
you and
your family.

13. WORKS CITED
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• Voigt, Kevin, and NerdWallet. “What Is Financial Planning and Why Is It
Important?” NerdWallet, NerdWallet, 8 Nov. 2018,
www.nerdwallet.com/blog/investing/what-is-financial-planning-and-why-is-it-
important/
• Fontinelle, Amy. “Building Your Financial Pyramid.” MassMutual Named One of the
2018 Worlds Most Ethical Companies,
www.massmutual.com/planning/articles/financial-pyramid.