Good personal financial planning brings a host of advantages. If you have one, you are more likely to:

• Pay your bills on time

• Save adequately for retirement

• Have an emergency fund

• Feel good about your financial life

There are many ways to build a financial plan and unfortunately it’s not usually covered in school.

In this post, we explore some of the components of robust financial planning in Wichita, regardless of the approach you take.

1.   An Estate Plan

Estate plans let you set out who you would like to care for your assets, should you be unable to do so because of illness, and who should get your wealth when you die. In it, who will administer your estate in the event of incapacity or death and how much you will allocate to each of your relatives are provided for. Unfortunately, 67 percent of Americans have no estate plan. When this is the case, the state already does and courts decide who gets powers of attorney and how assets are divided. If you are not sure you want a stranger deciding how your funds are split up for your family, now is the time to put one in place.

2.   Insurance Policies

No matter how much you save and invest, you can’t cover all your risks. Regardless of your net worth, you may encounter financial situations with intolerable downsides.

That’s where insurance can help. People with robust financial plans buy health and disability insurance to cover medical expenses and lost wages. And if they have dependents, they also get life insurance. Insurance is purchased to offload a risk we don’t want to retain ourselves to a larger company that can absorb that risk for a price, called a premium.

3.   Emergency Funds

Ideally, you should have three to twelve months’ worth of expenses in cash sitting in your bank account, just in case you lose your job or encounter an unexpected expense. An absolute minimum emergency fund would be $1,000 in cash. If you don’t have that, do whatever you can to get there as soon as possible.

4.   Retirement Income

Financial advisors recommend that you retire on at least 80 percent of your final income as a broad rule of thumb. However, you may need more than this if you still need to pay your mortgage, have debts, or have dependent children.

The best way to assess and map out your expenses and income needed to fund your retirement needs is to work with a financial planner who has the right software to assist you with the detailed and complex work of figuring out how your income needs, taxes and resources change over time in retirement. Rule of thumb is easy to under or over shoot. That’s why great software has been developed to solve these complex problems.

5.   Debt Reduction Plan

The average American has a consumer debt balance of $96,371. Therefore, you may require a debt management plan. Consolidating your debt may include paying off credit cards, personal loans, or other forms of borrowing. A financial coach or planner help to motivate in accomplishing your debt reduction goals.

6.   A Budget

Budgeting is the bread and butter of any personal financial plan, but only a minority of people do it.

Use apps for family financial planning and analysis that separate your expenses, showing you how much you are spending on entertainment, transport, travel, groceries, and so on. You can teach and automate software that is available so you don’t have to categorize every expense, which makes it an easier task than ever to complete. You can also set alerts that help you learn how much spending in a certain category feels like for the month.

7.   Net Worth Targets

Your net worth is the value of your assets minus liabilities. Ideally, you should have a net worth target in mind, and a date by which you want to reach it. (For instance, $300,000 by 2026).

To calculate your net worth, add up all your assets (such as home, car, cash balances, and money in your brokerage account) and subtract your liabilities (student loans, mortgages, and money you own on your credit card).

8.   Set Financial Goals

Lastly, set clear financial goals. Use a combination of short- and long-term objectives. For each goal, set a dollar figure and target date to achieve it. Also consider why you want to achieve a certain goal (for instance, to send a child to college or retire aged 55). A financial planner can help you identify more targeted and efficient action items that fit your needs and help you hit your goals sooner than you ever thought possible. A good strategy for the wrong problem doesn’t work well. There are many ways of accomplishing your goals. Using a trained professional with experience is well worth it since we only get one shot at this life. Don’t haphazardly live your life. Live with intention so you can have your best life possible with the time you have left.