http://www.columbusfinancialcoach.com/ Do it Yourself Financial Planning in 15 Easy Steps

1. Do it Yourself Financial Planning in 15 Easy Steps
1) The first step is to know what is your personal objectives and goals by using a financial
planning session(s)
2) What is your short term, medium term and long term life goal(s)?
3) If money was not an object where would you see yourself in 5, 15 and 30 years from
now? (Hint: it can be a career, where you like to live, education, car, house, etc.)
4) Prepare a budget of current expenses, and included all sources of income. How would
you rate yourself compared to income below budget, at the budget, or above budget?
5) Go to my website to see ways you can slim down the cost of household living at
http://www.columbusfinancialcoach.com/Cheap-City-Free-Guide.html &
http://columbusfinancialcoach.blogspot.com/2012/12/simple-money-management-
tips-power-to.html
6) Now complete a second budget showing the amount you reduced from your original
budget. If you’re still meeting or above budget, you will need to find other sources of
income or further ways of cutting of expenses. If you’re below or in the budget you can
move to the next point. If you still can not move your budget lower, I do offer
personalized coaching on my site at
http://www.columbusfinancialcoach.com/Services.html
7) Congregations, you are ready for the next step. You must take at least 10% of your
income each pay period and place 6% in retirement and 4% into a general fund which
includes emergency's, and vacation fund. I would recommend one to increasing this
account each year and every year by 1% or 2% to your retirement fund. If the additional
fund is available to give to religious/spiritual origination, or/and charities do so to 10%
of income. You will gain a tax advantage and do some good in your community. What
if, you do not have the available funds? You can donate your time to these
organizations. There is a note in my process of reading the most successful people have
always given money and/or gave their time. This relationship with the law of attraction,
that giving will help you back in the future. See my blog post on Law of Attrition: at:
http://columbusfinancialcoach.blogspot.com/2012/12/the-law-of-attraction-simple-
system-of.html or http://columbusfinancialcoach.blogspot.com/2012/11/why-does-
wealthy-have-more-money-then.html
8) Things happen, you will need to have insurance to cover unexpected liabilities,
including health, auto, home, life and disability insurance. Remember getting the
lowest cost insurance maybe not cover you in the event of accident or death, or
disability. If money is a concern rather buy employment based life and disability, rather
then not having enough coverage or not having no coverage. Once you improve your
situation buy a non-employment related insurance policy or use the employment to be
the gravy and not to meet liability minimums.
9) What is life insurance better for me Term or Cash Value? I would say most people that
cash value is not needed in most cases. I would first max out my IRA, or Roth IRA, or
401K, or similar retirement program, before even thinking of going for a cash value
policy. In most cases, a 30-year term product will protect you and your family so you

2. can build enough funds by investing in your personal savings, and retirement plan.
Most insurance agents disagree with this way, sure they are losing money. The facts
that most fixed-rate cash value insurance policies are making about 4.5% - 5.5% great
for today. But the stock market has an average return of 12%. So, using simple logic
how are you better going after 5.5% vs. 7% or 9% return in a bad year? Yes, there is a
risk; there are risks being too safe as well.
10) Where are going to put your money to grow? If your employer offers a 401k, or a
similar retirement program, and give you a match this is the way to go. At least take the
money the employer is giving you and match to the max. You would be surprised how
many people do not take advantage of this free money. For most people, the best
investment is to have the fund coming out your paycheck, and have an allocation table
to follow to ensure proper diversification
see:http://www.bankrate.com/brm/news/retirementguide2007/20070501_asset_allo
cation_chart_a1.asp. This is basic investment advice; I have written articles on
advanced investment strategies read more at
http://columbusfinancialcoach.blogspot.com/2012/12/the-strategies-from-genuss-of-
investing.html There are different allocation tables based on your age, and your target
date for retirement. Younger you are the more you can take more risk and as you get
closer to retirement you slowly decrease risk, not end all risk.
11) What do you do with you 4% start of placing the money in bank or credit union account
automatically from your paycheck to be placed into you’re saving the account. Once
your funds have reached a high enough amount, you can look at other options, like
CD’s short-term, investment account under a money market, bonds (Government, &
Corporate), treasury inflation protected securities (TIF’s’) conservative allocation
investment accounts (mutual funds or EFT’s) for this type of saving avoid anything
high risk! This is a short-term account, and you need low-risk investments. Do not
forget to leave at least $500, to $1000 to pay for urgent situations in your bank or
credit union account.
12)What is better for me pretax retirement (40lk/traditional IRA) or post-tax retirement
Roth IRA/Roth 401k)? I recommend everyone to go pretax up to there match. If you go
pretax after this or Roth is a personal choice based on your situation. Is it better to pay
taxes now or later? There is a feeling that we have very low taxes right now and it is
better to take advantage of the Roth. There is another way of looking at this. I am going
to pay taxes for the next 30 or 40 years without any benefit. Now, I personally have
pretax up to 10%, after that go with Roth. I believe that having 2 pots of money will
hedge for what the future may bring. If may need to hire a CPA or Tax lawyer to help
you find ways to reduce the taxes in the future. Besides we do not know what the
market will look like in the future. I personally believe we can take out the minimum
amount out of a pre-taxed fund each year, and paying the lowest tax bracket. Besides,
the government can resend the Roth IRA/Roth 401k if it is not working out for their
best interest.
13)You earn a 0% on equality, so why not take out a 30-year mortgage or 5-year car loan.
Do not get a return on equality confused with inflation. Most people see their house
values go up this is ROI is the inflation, not the equity working for you. You should put
the difference in your retirement account. Like I said before you can make 12% on
average on the stock market and only 0% on your equity. What is the point paying it off
faster? Now if you have high debts over 12% interests you should pay these off sooner
with your additional leveraged money. Plus you still receive a tax break for mortgage

3. interest and taxes. The same goes for a student loan, why pay back a low interest low
off sooner? When can you make more as an investment? This is a concept the wealthy
used call others peoples money or OPM.
14)You should have a last will drawn by a lawyer. A simple will can save part of your
money going to the government, and costly court costs later.
15) One trick I received from when I worked at Primerica: You shouldn’t hold back your
payment to make one payment. For example, if you are paid bi-monthly (Paid once at
the end of the month and paid on the 15th of the month) rather make two smaller
payments. Make a payment early and make the second on your next pay cycle. This will
reduce your interest. Since most loan calculated on a daily interest you are best to pay
them off using each paycheck cycle, even if it one half of a payment at a time. This will
work for credit cards, student loans, and car loans. It tends not to work for mortgages
because most of the home loans are government backed, and have a different system of
calculation on the interest. Last note, to avoid some troubles later, check with your
lenders to ensure that making a split payment will not cause issue, how your loan is
proceed.
Author
Derek P. Bliedung
Columbus Financial & Success Coach
www.columbusfinancialcoach.com