action plan

Implementing a Financial Plan

To this point the financial planning data has been gathered and analyzed, financial planning statements have been created, goals and objectives have been measured and financial gaps found.

The next step in the financial planning process is implementing the financial plan’s recommendations. Though this is not the last step in the process, most of the hard work is behind you. With that said, the best financial plan is worthless if it is not implemented.

Financial Planning Action Plan

To help with the implementation of a financial plan, many Advisors will create an “Action Plan”. Your financial planning action plan should include all of the tasks that you will need to accomplish in order to improve your financial situation.

Recommended Action - Your action plan is a list of all of the recommendations that you should accomplish in order to strengthen your financial plan. There are two ways of looking at your list. Depending on the situation you can list them by importance or chronologically (desired date of accomplishment).

Purpose of Accomplishing Goal - Next your financial planning action plan should include a description of what the recommended action accomplishes. This helps communicate the importance of accomplishing the recommendation and provides a audit trail of sorts. This will come in handy if you change financial planners or want to refresh your financial plan.

Target Date - All great goals and objectives are time driven. This means choosing a reasonable amount of time in which to implement the recommendation. This is the easiest way to keep everyone on track.

Finding Professionals and Specialists

When implementing a financial plan you will probably need to rely on the expertise of a few specialists. These professionals can help you draft legal documents, find the right service for your needs and help leverage a specific program or opportunity.

Certified Public Accountant - A CPA can help with the preparation of financial statement and budgets. In addition they will also help prepare your taxes and suggest opportunities to reduce your tax liability.

Insurance and Brokerage Services - Insurance and investing are two pillars of sound financial planning. As part of your financial planning action plan you many need to open a brokerage account and request a consultation from a insurance professional.

Estate Planning Lawyers - Estate planning is predominately based in law and property rights. Finding a good Lawyer will help you navigate the complexities of the law and help determine the best services for your situation.

Automate as Much as Possible

I have always been a fan of making life simple. This is why I try to automate as much of my budget as possible. Automating a budget is extremely easy thanks to online banking and direct deposit. When you choose to implement one of the most challenging parts of your financial plan, the budget, you are increasing the probability of financial success. I discuss a little about how to automate a budget in my post about managing household finances.

Implementing a financial plan takes a lot of discipline and sometimes a little help from specialists. Ensure that your action plan includes the recommendation, its purpose and an accomplishment date. If you have any questions, don’t hesitate to leave them in the comments below.