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Mastering Your Money: Six Financial Planning Tips

Updated: Apr 21, 2023

Financial planning is like a map that guides you on your financial journey. It involves setting goals, creating a plan to reach them, and keeping track of your progress.

For example, let's say you want to buy a house, sell a business, or retire in five years. To make a financial plan for this, you would do the following:

  • Compute how much money you need to save and invest.

  • Make a budget and plan to pay for your goal.

  • Study the market and keep track of your progress toward your objective.

A good financial plan includes retirement, investment, estate, and tax planning. When you have a financial plan, you'll feel more confident and in control of your financial future.

How does our approach different? KW Wealth takes a different approach to financial planning. The personalized and forward-thinking approach of KW Wealth ensures that their clients' action plans remain relevant and achievable, even amidst economic changes and potential lifestyle alterations. Recognizing that financial planning can be daunting, KW Wealth takes the time to educate its clients on their financial plans and how to execute them effectively. KW Wealth believes financial planning should be more than just a one-size-fits-all approach and tailor their strategies to each client's unique circumstances and goals. By considering forward-looking variables such as taxes, estate planning, and portfolio contributions, KW Wealth ensures its clients are well-prepared for future changes.

But it's not just individuals who benefit from having a financial plan. Portfolio managers must also deeply understand their client's financial objectives to provide tailored investment solutions that align with their goals and risk tolerance. By understanding their client's financial strategies, portfolio managers can better manage their portfolios and make informed investment decisions. A financial plan can help businesses set financial goals, develop budgets, forecast future revenue and expenses, and make informed decisions about investments and expansions. Nonprofit organizations can use financial planning to ensure they have the necessary resources to accomplish their mission and goals. Government entities can benefit from financial planning by efficiently using taxpayer money to provide public services and infrastructure.

Financial Planning: 6 Tips to Organizing Your Finances

Financial planning is essential to managing your money and achieving your long-term financial goals. Here are six steps to help you organize your finances:

Tip #1 - Will and Trust Review

Update your will and trust documents to reflect your current wishes. Ensure you have appointed a trusted executor or trustee to fulfill your wishes. Consider setting up a living trust to avoid probate and ensure your assets are distributed according to your wishes.

An example: Jake is a 65-year-old married grandfather of young grandkids. He has a will that he created many years ago but has yet to update since the birth of his third grandchild. After meeting with a financial planner, Jake should work with his estate planner to review and update his will and ensure that he has appointed a trusted executor to fulfill his wishes. In addition, Jake decides to amend his living trust to avoid probate and ensure that his assets are distributed to his beneficiaries according to his wishes. By updating his will and creating a living trust, Jake has taken an essential step to preserve and protect his family's future.

Tip #2 -Retirement Plans

"By failing to prepare, you are preparing to fail." - Benjamin Franklin

Review your retirement plans, assess your retirement goals, and adjust your savings plan as needed. Consider working with a financial advisor to ensure your investments align with your objectives and risk tolerance.

An example: Amy, a young doctor, just started a solo practice at 38. She will need to develop a strategy regarding a 401(k) plan, profit-sharing plan, business liability protection, finance planning, and entity tax filing to suit her as a new small business owner. Or does Amy want to know when she can save $2 million to retire and maintain the same lifestyle? She will work with a financial advisor to ensure her investments align with your objectives, time horizon, and risk tolerance. A financial advisor will make a plan and reallocate Amy's assets to align with her goals and the resources proposed. Doing so makes Amy feel more confident to start her business and stay on track to achieve her retirement goals.

Tip #3 - Bank, Brokerage, and Pension Accounts

Review your bank, brokerage, and pension accounts to ensure they are organized and up to date. Consider consolidating accounts to simplify your financial management. Ensuring beneficiaries are updated on all accounts can help avoid any confusion or legal issues in the event of your passing.

For instance: you have multiple 401(k) accounts with previous employers and a traditional IRA account. Consolidating your accounts into a single IRA account could simplify your financial management and reduce fees. Nevertheless, you are currently under a pending divorce or have legal issues with debt collectors. In that case, you must review each account's performance, inception date, registry, and investment options to ensure they align with your financial goals and asset protection. It may or may not be suitable to consolidate all assets in one account because 401(k) falls under ERISA guidelines and is protected from creditors.

Tip #4 - Taxes and Real Estate Organization

Gather all relevant tax documents and consider working with a tax professional to ensure you maximize deductions and minimize tax liabilities. Organize your real estate documents and consider getting a current property appraisal.

Let's say your family owns residential property, commercial property, or an LLC, S corp, or C corp that generates rental and other business income. To maximize deductions, you should keep accurate records of all related expenses, including but not limited to the following:

  1. Mortgage interest

  2. Property taxes

  3. Insurance premiums

  4. Maintenance, repair, and material costs

  5. Property management fees

  6. Advertising and marketing expenses

  7. Legal, professional, and accounting fees

  8. Depreciation

A financial planner should help you organize legitimate deductions to reduce your taxable income and liability.

Tip #5 - Children and Other Dependents Plan

Consider setting up a trust for your children or other dependents to ensure they are cared for during your death. Ensure you have appointed a guardian for any minor children and consider setting up a special needs trust for any dependents with disabilities.

For example, a couple with two children and one of whom is diagnosed with autism. The couple wants to ensure that both of their children are cared for in the event of their death. To do this, they consider setting up a trust for their children and providing financial support for their children's needs. They work with an estate planner to draft a trust document that outlines the terms and conditions of the trust, such as guardianship, special clauses for their child with a disability, and who and how will be trustworthy to distribute the fund.

Tip #6 - Letter to Loved Ones

Write a letter to your loved ones outlining your final wishes and expressing your love and gratitude. Ensure your letter is kept in a safe and accessible place.

As we navigate through the demands of daily life, it's easy to lose sight of what truly matters. When our time here ends, our loved ones will miss us dearly. Unfortunately, I have seen many cases where heirs are frozen and reluctant to handle financial affairs after a loved one's passing. That's why I want to stress the importance of writing a letter expressing what truly matters - our love for each other and the strength of our relationships. This is one of the most valuable things we can do for posthumous planning. It provides comfort to our loved ones and helps ease the burden of making difficult financial decisions during a time of grief.

Following these six tips, you can prepare a comprehensive financial plan that addresses your goals, protects your assets, and ensures your loved ones are cared for.

"The best time to plant a tree was 20 years ago. The second-best time is now." - Chinese Proverb.

At KW Wealth Management, we don't just create a financial plan and leave clients a binder to implement. Our planning approach includes following up with clients to encourage them to execute the action plan and make necessary adjustments as life changes occur. We understand that life can be unpredictable. We are proactive in detecting any problems or issues that may arise and making the necessary adjustments to ensure our client's financial goals remain on track. KW Wealth emphasizes that financial planning should happen before retirement, not after, as it's critical to achieving long-term financial goals.

By working concurrently with KW Wealth Management, we can schedule periodic check-ins and adjustments to the plan to ensure it stays up-to-date and continues to meet your needs over time. With a concrete financial plan, you can have greater confidence in navigating whatever life may bring.



The information provided does not constitute, in any way, a solicitation or inducement to buy or sell securities and similar products. Comments and analyses reflect the views of KW WEALTH MANAGEMENT at any given time and are subject to change at any time. Moreover, they can not constitute a commitment or guarantee on the part of KW WEALTH MANAGEMENT. The recipient acknowledges and agrees that by their very nature, any investment in a financial instrument is random. Therefore, any such investment constitutes a risky investment for which the recipient is solely responsible.

All investing is subject to risk, including the possible loss of your money. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or a mix of funds will meet your investment objectives or provide you with a given income level. We recommend that you consult a tax or financial advisor about your situation.

KW Wealth is neither a law firm nor a CPA firm; If you have questions concerning the meaning or applications of a particular tax law, you should consult an attorney or a CPA specializing in this area. This material is provided for informational purposes only, and nothing herein constitutes investment, legal, accounting, or tax advice or a recommendation to buy, sell or hold a security. Any views or opinions expressed may not reflect those of the firm as a whole. KW Wealth Management reserves the right to amend or change the content at any time and for any reason at its discretion.

2023 KW Wealth Management LLC. All rights reserved.

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