These investments might include a variety of trusts, generally used in college education funding, educational IRAs, custodial accounts, stocks, bonds, mutual funds, real estate, limited partnership interests, etc. Probably the most important area of financial planning is establishing a savings plan and sticking to it. This is crucial to attain your personal financial goals. Cash flow planning involves preparing a budget and comparing actual to budgeted amounts to help discipline and monitor spending habits. The idea is to increase discretionary income by reducing personal debt and controlling expenses.
Many people spend more than they make.
If you are experiencing cash flow problems, a financial planner can assist you in establishing an attainable budget. It is typical for personal income taxes to be your largest cash outflow, especially for high income tax payers. Issues to consider include the timing of capital gains and losses, alternative minimum tax, IRA contributions, itemized deductions, passive activities, investment property, estimated tax and current changes in the tax law. A financial planner can keep you informed of ways to minimize tax and thus increase your cash flow and discretionary income. Today, more than ever, it is imperative to plan for retirement.