The Comprehensive Financial Planning Handbook

Financial planning can be a headache. From dealing with inflation to organizing a will, there are many financial responsibilities you have to deal with. Knowing where to start can be a challenge all on its own, which is why we developed a comprehensive financial planning handbook, so you can reference a guide on how to handle different financial tasks. Keep reading to dive into our helpful guide.

Table of Contents

1. 5 Questions to Ask Before Hiring a Personal Financial Specialist
2. What Does Rising Inflation Really Mean for Consumers?
3. 3 Mistakes a College Planning Consultant Helps You Avoid
4. Breaking Down the Buy-Sell Agreement
5. How Keep Your Financial House Organized
6. What Happens When You Don’t Organize a Will and Power of Attorney?

5 Questions to Ask Before Hiring a Personal Financial Specialist

A personal financial specialist is a certification for certified public accountants that allows them to include financial planning and wealth management in their catalog of services. Business owners are also able to take advantage of a PFS to help their organization build wealth and remain financially sound. To know if you are ready to take the next step and hire a PFS, here are some questions you should ask yourself. 

1. What Is Your Investment Strategy? 

Understanding your investment strategy is a key component of understanding whether or not you should hire a PFS. How often are you monitoring and adjusting your investments? Are you setting goals and objectives? A financial specialist can help you determine your goals and ensure your investment strategy aligns with those goals. 

2. How Organized Are Your Finances?

As your portfolio continues to grow, it may get more challenging to keep it all organized. Financial specialists can help you keep track of your different financial assets and consolidate them when it makes sense. They are also knowledgeable about what investments to make while mitigating any potential risks. 

3. Are You Making a Life-Changing Decision?

Hiring a financial professional when dealing with a huge change like the selling of a business is a smart move for you. They are educated on the tax implications that accompany this type of scenario and can help talk you through decisions to ensure you’re making the right one. 

4. Is Tax Planning Becoming Overwhelming?

Tax planning and financial planning are interconnected and working with a professional that can assist with both is a smart move for your business. They will help you avoid financial mistakes that will result in large taxes and can help take some of the load off your plate when tax season rolls around.  

5. What is Your Retirement Plan?

A PFS will work with you on your goals for the short and long term. This way they can help you develop a comprehensive plan to help you get there. Retirement planning is evolving which makes an educated professional who understands the changing landscape a huge asset to have in your court. 

For more information about the questions, you should be asking before hiring a professional financial specialist, read this helpful article. 

What Does Rising Inflation Really Mean for Consumers?

Many business owners have been concerned about rising inflation and what that means for them. You may be wondering where you should put your money and what other changes accompany this new landscape we are dealing with. Here is what to expect. 

The Current State of Rising Inflation

Rising inflation has been inevitable since the start of the COVID-19 pandemic. It has been most prominent in the food, automobile, energy, and housing markets however, it has been said that it should be short-lived and may actually have a positive impact in the long run. 

The government has made it clear that they don’t believe this rising inflation is here to stay and hopefully things will go back to normal as people head back to work. However, with that said, the question remains; how long will that take? 

How Can You Act Proactively?

Unfortunately when inflation spikes, small businesses are hit harder than large corporations. It costs more to purchase the same things and therefore, your purchasing power is cut. There are two ways you can act proactively:

1. Stay in the Stock Market

It is essential to stay in the stock market to protect your long-term assets. While inflation may hinder your stocks right now, it is typically beneficial in the long run. 

2. Invest in Mutual Funds

When you invest in a mutual fund, you contribute to a pool of money alongside other investors, managed by a team of professionals looking to purchase securities. More specifically, when you take a Passive Asset Class Management Approach, you go the route of broad diversification and a controlled-risk environment. 

Rising inflation is a concern of many small business owners. For a deeper understanding of what rising inflation means for you and how you can act proactively, take a look at our informative guide.

3 Mistakes a College Planning Consultant Helps You Avoid

Planning for your child’s future is a big task, and with college tuition on the rise, it is more difficult than ever to properly prepare for this future. Luckily, college planning consultants are available to assist you with the planning process to help you bypass making mistakes along the way. Here are three main mistakes a college planning consultant will help you avoid. 

Not Considering Community College

There is a common misconception that community college is less valuable than other colleges and universities. This idea is simply incorrect. Community colleges can be a great way to reach the same end goal, more affordably. Even just starting the first two years at a community college has numerous benefits including:

• Saving money on tuition
• A great way for students to transition out of high school
• Many community colleges still offer dorm living
• Smaller class sizes mean a more hands-on learning environment

Avoiding the Income Talk

The financial burden of higher education can be one of the most intimidating factors when it comes to college planning. While income shouldn’t be the only determining factor for what your child wants to major in, it should be a factor. Your child should understand that if they have to take out a loan to pay for school, certain career choices will put them deeper into debt than others and some careers will make it more difficult to pay off student loans than others. 

Not Applying for FAFSA

While the Free Application for Federal Student Aid (FAFSA) is typically used for students who need free financial aid, it can also be beneficial for gaining access to The Stafford (Direct Federal Loan) and other scholarship opportunities. All too often families think they won’t be eligible so they don’t even apply which leaves money on the table. 

There are many mistakes families make when planning for their children’s college education. To learn more about these mistakes and see one more, check out this article. 

Breaking Down the Buy-Sell Agreement

Small businesses that hope to protect the longevity of their company need to implement a buy-sell agreement. This will protect the continuity of your organization if anything happens to any of the shareholders. Keep reading to learn more about what a buy-sell agreement is and whether or not you need one. 

What Is a Buy-Sell Agreement?

A buy-sell agreement is a legally binding contract between two or more shareholders that defines how their portion of ownership should be handled in case of a triggering event. This will streamline the process so there isn’t confusion if something goes wrong. 

What Are the Triggering Events in a Buy-Sell Agreement?

Triggering events are the events that activate the buy-sell agreement. Some of these can include:

• Death
• Divorce
• Termination of Employment
• Bankruptcy 
• Disability 

Do You Really Need a Buy-Sell Agreement?

Every organization owned by two or more parties should have a buy-sell agreement. Here are a few reasons why:

• You’ll have an exit plan for your members
• It will give clear instructions on what should happen to a partners portion if they pass away
• Ensures job stability for other employees
• Establishes a set value for the business

A buy-sell agreement protects you and your partners in the instance of a life-altering event. Without an agreement, your company could be in jeopardy if something catastrophic happens. 

The Basics of Crafting a Buy-Sell Agreement

1. Decide Which Agreement is Right For You

There are multiple kinds of buy-sell agreements. These include the cross-purchase agreement, entity-purchase agreement, and hybrid agreements. 

2. Draft the Agreement Early

It is never too early to have a buy-sell agreement. 

3. Be Specific 

Your agreement should be precise with what qualifies as a triggering event and exactly what will happen. 

4. Specify the Valuation Method

How will the value of the portion be determined? 

5. Take out Life Insurance Policies

Life insurance policies should be taken out on each of the partners so that in case of an emergency, the other partners have the funds to purchase the share of the company. 

6. Account for Taxes

Research the different tax implications for different buy-sell agreements to determine which is right for you. 
For more information about a buy-sell agreement, visit this blog.

Keep Your Financial House Organized With an Estate Planning Firm

When you hear the term estate planning, oftentimes people think it is only for the wealthy and that your family doesn’t need to worry about this. However, everyone should have an estate plan. Here is why. 

What Is Estate Planning?

The term estate refers to assets such as real estate, vehicles, business ventures, and cash. An estate plan is composed of documents that outline your intentions for these assets when it comes time for them to be passed on. These plans ensure your assets are passed on the way you intended when the time comes and relieves stress on your family members who are left to handle them. 

What Is an Estate Planning Firm?

An estate planning firm is a collection of licensed professionals who can assist with the creation, maintenance, and execution of an estate plan. They are educated on legal jargon that accompanies these types of plans and can help you draft a plan that prioritizes your goals. These firms can also assist you in navigating the taxes that come with estate planning so you can be sure you are remaining compliant. 

Why Should You Work With a Firm

An estate planning firm will assist you in drafting and seeing your estate plan through. They are a team of professionals who have your back and can help you prioritize and execute your goals. 
To dive deeper into what an estate planning firm is and how you can benefit from working with one, take a look at this guide.

What Happens When You Don’t Organize a Will and Power of Attorney?

At least 68% of Americans do not have a will or power of attorney which means they are not prepared for the future. Without a will and power of attorney, an immense burden may be placed on your friends and family to settle your affairs when you pass away or if you become unable to care for yourself. Here is what could happen without a will or power of attorney. 

What Is a Will?

A will is a legal document that details what should happen with any children or property if you pass away. This document should be extremely detailed so there is no confusion when it comes time to handle your assets.

What Is a Power of Attorney? 

A power of attorney is a legal document that gives another person the power to make decisions for you if something happens that makes you unable to care for yourself. You want to choose someone who will act in your best interests. 

How Do They Work Together?

Your power of attorney provides you protection during your lifetime, whereas your will provides protection to your assets after you are gone. Together, they work to protect you and your wishes during your lifetime and after. 

Effects of Not Having Them

Without a will or power of attorney, if something happens to you a huge amount of stress will be placed on your family and friends. Here are some specific downsides to not having a will or power of attorney. 

Without a Will

• Can’t be sure your wishes will be met
• Can be a huge burden on your family after you pass
• Estranged relatives may obtain some of your assets 
• Your children’s care will be left up to the courts
• Can lead to delays, more expenses, and property loss

Without a Power of Attorney

• Appointing a caretaker is more strenuous and time-consuming
• The court appoints a caretaker and the family has no say
• The caretaker chosen may not be fully qualified to represent your needs

A will and power of attorney are necessary documents to have at any age to ensure your wishes are taken into account during and after your life. For more information about these two essential items, read this informative article.