Financial Planning
This collection of personal financial information is directed to works for a
living. Everyone needs to know more about financial matters. The SOURCE
for much of this information is the GSA Consumer Information Catalog published
by the Federal Citizen Information Center.
There's
a Lot to Learn about Money
YOU CAN TAKE CHARGE OF YOUR FINANCIAL FUTURE
Federal Reserve System
"No matter who you are, making
informed decisions about what to do with your money will help build a more
stable financial future for you and your family." - Alan Greenspan
Take Charge
It's possible to meet your financial goals
- whether your income is small, medium or large.
By looking for good information on managing
your finances, along with choosing to budget, save and use credit wisely, you
can:
 |
Buy a home.
|
Send your child to college.
|
Start a business.
|
Pay off debts.
|
Put money away for a rainy day.
|
Save for retirement.
|
| | | | |
No matter who you are, you can take charge
of your financial future. Start today!
To get you started, here are some simple
tips.
Set Goals
Most people who have money didn't get it
overnight. They set goals and worked hard to reach them.
TRY THIS: Write down your short-term
and long-term goals. An example of a short-term goal is saving up for holiday
gifts; a long-term goal is saving for a home.
|
Set due dates for reaching your goals.
|
Be realistic.
|
Be flexible. (It's OK to adjust your
goals and strategies.)
|
Go back and look at your goals after
six months to check your progress.
|
| | |
Develop a
Budget
 Find
out where your money is going. Unless you're tracking your money, it's probably
not going where you really want it to.
TRY THIS: Write down your total
monthly take-home pay. Then list your monthly expenses. At the end of the month,
subtract those expenses from your total pay.
|
Look for places to save.
|
Use this information to set a monthly
budget that includes saving.
|
Review how things are going each month.
|
| |
TIP:
Carry a small notebook. Write down everything you spend. Include small things
like candy bars.
Start Saving
 Small
amounts of money saved regularly add up fast. Compound interest, which lets you
earn interest on interest, will make your savings grow even faster.
TRY THIS: Open a savings account.
Have part of your paycheck deposited directly into your savings account every
month.
|
Shop for the best interest rates.
|
Understand all fees and charges.
|
Take advantage of your company's 401
(k) or invest in an IRA (individual retirement account).
|
As your income rises, increase the
percentage you save.
|
Know that the greater the potential
profit on an investment, the greater the potential risk of losing your
money.
|
| | | |
TIP:
The earlier in life you start saving, the more you'll have later.
Manage Credit
Wisely
Borrowing can help you meet your long-term
goals for an education, car or home. But borrowing for day-to-day needs and
wants gets many people into financial trouble.
TRY THIS: Before using your credit
card, getting a payday loan, renting-to-own or borrowing against your home's
equity, ask yourself if you really need to borrow the money.
|
Avoid spur-of-the-moment purchases.
|
Set a monthly limit on credit card
charges.
|
Pay more than the minimum on your
credit card bill.
|
| |
TIP: THE MINIMUM PAYMENT
TRAP
It would take 61 years to pay off a $5,000 credit card balance if you make only
the minimum monthly payment. You would pay almost $16,000* in interest!
* Assuming a 14% interest rate and
minimum payment of 1.5% of the outstanding balance.
Protect Your
Credit Rating
Lenders use credit reports to decide
whether to loan money. Insurance companies, landlords and employers also check
credit reports. A report that shows defaults or late payments- even 30 days
late-can mean not getting a loan or paying a higher interest rate.
TRY THIS: Find out your credit
rating. Call a credit bureau for a copy of your report.
|
Pay all bills on time.
|
If you're having trouble paying bills,
get advice from a reputable nonprofit organization before you become
delinquent.
|
Check your credit report every year.
|
Alert the credit bureau if you see
errors in your report.
|
| | |
TIP: CREDIT BUREAUS
Equifax 1-800-685-1111
Experian 1-888-397-3742
Trans Union 1-800-888-4213
Get the Best
Deal
When you borrow money, you have a right and
a responsibility to know all the loan's terms and conditions. Ask questions and
compare interest rates and fees. Know what's at stake if you don't make your
payments.
TRY THIS: Before you borrow money,
ask these questions:
|
What is the interest rate?
|
What are all the fees?
|
How much will I have paid in interest
when the loan is paid off?
|
Can I pay it off early without penalty?
|
| | |
AND THIS: Shop around and compare.
Don't get taken.
|
Question an offer that makes borrowing
sound too good to be true.
|
Always read and understand the fine
print.
|
Seek help if you need it.
|
| |
TIP: SAVE MONEY WITH THE
RIGHT LOAN
Get
the Lowest Rate
$15,000
Car Loan for 5 Years
|
Lender
|
Interest rate
|
Total interest
|
Pixley Bank
|
6.5%
|
$ 2,609.53
|
ABC Car loan
|
7.5%
|
$ 3,034.15
|
XYZ Finance Company
|
8.75%
|
$ 3,573.51
|
Choose
the Shortest Term
$15,000 Car Loan
at 10 Percent Interest
|
|
3-year
|
4-year
|
5-year
|
Number of payments
|
36
|
48
|
60
|
Payment
|
$ 484
|
$ 380
|
$ 318
|
Total paid
|
$ 17,424
|
$ 18,261
|
$ 19,122
|
Interest saved
|
$ 1,698
|
$ 861
|
$0
|
Take Control
Getting the right information can help you
gain control of your finances.
TRY THIS: When you need information,
make sure the source is reliable.
|
Know who you are dealing with.
|
Make sure the resource is credible and
properly trained, accredited or certified.
|
Ask for references.
|
Understand any fees or charges.
|
Make sure they're not trying to sell a
product or service.
|
Avoid resources that charge excessive
fees.
|
Ask questions.
|
| | | | | |
Learn More
About Money
 There's
a lot to learn about money, and there's plenty of free information available.
The Federal Reserve education web site, www.federalreserveeducation.org,
offers personal financial education information and links to many useful
resources.
TRY THIS: Look for organizations in
your community that can help you learn more about setting financial goals,
budgeting, saving, using credit wisely and getting the best deal. Here are some
possibilities:
|
Nonprofit credit counseling service
|
Library
|
Community college
|
Bank or credit union
|
Nonprofit community development
corporation
|
Nonprofit housing organization
|
Religious organization
|
Senior citizen center
|
Employee assistance program
|
Cooperative extension service
|
| | | | | | | | |
|
10 Questions
to Ask When Choosing a Financial Planner
You may be considering help from a financial planner for a number of
reasons, whether it's deciding to buy a new home, planning for
retirement or your children's education, or simply not having the time
or expertise to get your finances in order. Whatever your needs, working
with a financial planner can be a helpful step in securing your
financial future.
The questions in this brochure will help you interview and evaluate
several financial planners to find the one that's right for you. You
will want to select a competent, qualified professional with whom you
feel comfortable, one whose business style suits your financial planning
needs. An interview checklist has been included for your convenience.
|
|
|
|
10
Questions
|
|
|
1. What experience do you have?
Find out how long the planner has been in practice and the number and
types of companies with which she has been associated. Ask the planner
to briefly describe her work experience and how it relates to her
current practice. Choose a financial planner who has experience
counseling individuals on their financial needs.
2. What are your qualifications?
The term "financial planner" is used by many financial
professionals. Ask the planner what qualifies him to offer financial
planning advice and whether he is recognized as a CERTIFIED FINANCIAL
PLANNER™ professional or CFP® practitioner, a Certified
Public Accountant/ Personal Financial Specialist (CPA/PFS), or a
Chartered Financial Consultant (ChFC). Look for a planner who has proven
experience in financial planning topics such as insurance, tax planning,
investments, estate planning or retirement planning. Determine what
steps the planner takes to stay current with changes and developments in
the financial planning field. If the planner holds a financial planning
designation or certification, check on his background with CFP Board or
other relevant professional organizations.
3. What services do you offer?
The services a financial planner offers depend on a number of factors
including credentials, licenses and areas of expertise. Generally,
financial planners cannot sell insurance or securities products such as
mutual funds or stocks without the proper licenses, or give investment
advice unless registered with state or Federal authorities. Some
planners offer financial planning advice on a range of topics but do not
sell financial products. Others may provide advice only in specific
areas such as estate planning or on tax matters.
4. What is your approach to financial planning?
Ask the financial planner about the type of clients and financial
situations she typically likes to work with. Some planners prefer to
develop one plan by bringing together allof your financial goals. Others
provide advice on specific areas, as needed. Make sure the planner's
viewpoint on investing is not too cautious or overly aggressive for you.
Some planners require you to have a certain net worth before offering
services. Find out if the planner will carry out the financial
recommendations developed for you or refer you to others who will do so.
5. Will you be the only person working with me?
The financial planner may work with you himself or have others in the
office assist him. You may want to meet everyone who will be working
with you. If the planner works with professionals outside his own
practice (such as attorneys, insurance agents or tax specialists) to
develop or carry out financial planning recommendations, get a list of
their names to check on their backgrounds.
6. How will I pay for your services?
As part of your financial planning agreement, the financial planner
should clearly tell you in writing how she will be paid for the services
to be provided.
Planners can be paid in several ways:
|
A salary paid by the company for which the planner works. The
planner's employer receives payment from you or others, either in
fees or commissions, in order to pay the planner's salary.
|
Fees based on an hourly rate, a flat rate, or on a percentage of
your assets and/or income.
|
Commissions paid by a third party from the products sold to you
to carry out the financial planning recommendations. Commissions are
usually a percentage of the amount you invest in a product.
|
A combination of fees and commissions whereby fees are charged
for the amount of work done to develop financial planning
recommendations and commissions are received from any products sold.
In addition, some planners may offset some portion of the fees you
pay if they receive commissions for carrying out their
recommendations.
|
| | |
7. How much do you typically charge?
While the amount you pay the planner will depend on your particular
needs, the financial planner should be able to provide you with an
estimate of possible costs based on the work to be performed. Such costs
should include the planner's hourly rates or flat fees or the percentage
he would receive as commission on products you may purchase as part of
the financial planning recommendations.
8. Could anyone besides me benefit from your recommendations?
Some business relationships or partnerships that a planner has could
affect her professional judgment while working with you, inhibiting the
planner from acting in your best interest. Ask the planner to provide
you with a description of her conflicts of interest in writing. For
example, financial planners who sell insurance policies, securities or
mutual funds have a business relationship with the companies that
provide these financial products. The planner may also have
relationships or partnerships that should be disclosed to you, such as
business she receives for referring you to an insurance agent,
accountant or attorney for implementation of planning suggestions.
9. Have you ever been publicly disciplined for any unlawful or
unethical actions in your professional career?
Several government and professional regulatory organizations, such as
the National Association of Securities Dealers (NASD), your state
insurance and securities departments, and CFP Board keep records on the
disciplinary history of financial planners and advisers. Ask what
organizations the planner is regulated by and contact these groups to
conduct a background check. (See listing at right.) All financial
planners who have registered as investment advisers with the Securities
and Exchange Commission or state securities agencies, or who are
associated with a company that is registered as an investment adviser,
must be able to provide you with a disclosure form called Form ADV Part
II or the state equivalent of that form.
10. Can I have it in writing?
Ask the planner to provide you with a written agreement that details the
services that will be provided. Keep this document in your files for
future reference.
|
Checklist
for Interviewing a Financial Planner
|
|
|
Planner's Name: __________________________________________________
Company: _______________________________________________________
Address: ________________________________________________________
Phone: __________________________________________________________
Date: ___________________________________________________________
1. Do you have experience in providing advice on the topics below?
If yes, indicate the number of years.
|
Retirement planning
|
Investment planning
|
Tax planning
|
Estate planning
|
Insurance planning
|
Integrated planning
|
Other
|
| | | | | |
2. What are your areas of specialization?
What qualifies you in this field?
3. a. How long have you been offering financial planning advice to
clients?
|
Less than one year
|
One to four years
|
Five to 10 years
|
More than 10 years
|
| | |
b. How many clients do you currently have?
|
Less than 10 clients
|
10 to 39
|
40 to 79
|
80 +
|
| | |
4. Briefly describe your work history.
5. What are your educational qualifications?
Give area of study.
|
Certificate
|
Undergraduate degree
|
Advanced degree
|
Other
|
| | |
6. What financial planning designation(s) or certification(s) do you
hold?
|
Certified Financial Planner™ or CFP®
|
Certified Public Accountant/Personal Financial Specialist (CPA/PFS)
|
Chartered Financial Consultant (ChFC)
|
Other
|
| | |
7. What financial planning continuing education requirements do you
fulfill?
8.What licenses do you hold?
|
Insurance
|
Securities
|
CPA
|
J.D.
|
Other
|
| | | |
9. a. Are you personally licensed or registered as an Investment
Adviser with the:
|
State(s)?
|
Federal Government?
|
|
If no, why not?
b. Is your firm licensed or registered as an Investment Adviser with
the:
|
State(s)?
|
Federal Government?
|
|
If no, why not?
c. Will you provide me with your disclosure document Form ADV Part
II or its state equivalent?
|
Yes
|
No
|
|
If no, why not?
10. What services do you offer?
11. Describe your approach to financial planning.
12. a. Who will work with me?
|
Planner
|
Associate(s)
|
|
b. Will the same individual(s) review my financial situation?
|
Yes
|
No
|
|
If no, who will?
13. How are you paid for your services?
|
Fee
|
Commission
|
Fee and commission
|
Salary
|
Other
|
| | | |
14. What do you typically charge?
a. Fee:
Hourly rate $ _________
Flat fee (range) $ _________ to $ _________
Percentage of assets under management _________ percent
b. Commission:
What is the approximate percentage of the investment or
premium you receive on:
stocks and bonds _________
mutual funds _________
annuities _________
insurance products _________
other _________
15. a. Do you have a business affiliation with any company whose
products or services you are recommending?
|
Yes
|
No
|
|
Explain:
b. Is any of your compensation based on selling products?
|
Yes
|
No
|
|
Explain:
c. Do professionals and sales agents to whom you may refer me send
business, fees or any other benefits to you?
|
Yes
|
No
|
|
Explain:
d. Do you have an affiliation with a broker/dealer?
|
Yes
|
No
|
|
e. Are you an owner of, or connected with, any other company whose
services or products I will use?
|
Yes
|
No
|
|
Explain:
16. Do you provide a written client engagement agreement?
|
Yes
|
No
|
|
If no, why not?
|
To Check the
Disciplinary History of a Financial Planner or Adviser
|
|
|
Certified Financial Planner Board of Standards, Inc.
888-237-6275 - www.CFP.net/search
North American Securities Administrators Association
202-737-0900 - www.nasaa.org
National Association of Insurance Commissioners
816-842-3600 - www.naic.org
National Association of Securities
Dealers Regulation
800-289-9999 - www.nasdr.com
National Fraud Exchange (fee involved)
800-822-0416
Securities and Exchange Commission
202-942-7040 - www.sec.gov
|
To Find a Financial
Planner in Your Area
|
|
|
Financial Planning Association
800-282-7526 - www.fpanet.org
National Association of Personal Financial Advisors
888-333-6659 - www.napfa.org
American Institute of Certified Public Accountants/Personal
Financial Planning Division
888-999-9256 - www.aicpa.org
Society of Financial Service Professionals
888-243-2258 - www.financialpro.org
|
Learn About Financial
Planning Online
|
|
|
CFP Board's Web site, www.CFP.net/learn,
is a comprehensive resource for financial planning, offering useful
information for visitors at every stage of the financial planning
learning curve. Interactive tools provide help for your personal
situation, including changing jobs, managing debt, planning your
retirement and more. Join the eNewsletter for updates and check back
regularly to participate in polls and quizzes.
|
|
|
|
|
|
|
Your Rights
as a Financial Planning Client
Working with a financial planner can be an extremely rewarding and
valuable experience for you and your family. If you've decided to work
with a financial planner, it's important to understand your rights in
this professional relationship.
This brochure describes the kind of treatment you deserve from your
financial planner and helps you recognize when he or she is putting your
interests and needs first. You can take an active role in shaping your
financial future when you know your rights and what to expect from your
financial planner.
|
|
|
|
You
have the right to . . . .
|
|
|
You have the right to a planner who has integrity
Trust between you and your financial planner is central to a
successful financial planning relationship. You rely on your planner's
honesty, professionalism and abilities to achieve your financial and
life goals. When you know that your planner takes his or her
professional obligations seriously, and places principles over personal
gain, you can develop the type of partnership that is crucial to the
success of any professional relationship.
You have the right to objective advice
Your needs should be at the heart of all recommendations made by
your financial planner. Your planner should use his or her experience
and judgment to carefully consider your situation, and provide you with
advice that best meets your goals. Sometimes, this objectivity may
require the planner to explain that your goals are unrealistic given
your current resources and financial commitments. Your planner may then
suggest alternative goals or priorities.
You have the right to a planner who is competent
You have the right to expect your planner to demonstrate an
appropriate level of knowledge to offer financial planning advice, such
as attainment of the Certified Financial PlannerTM certification or
Chartered Financial Consultant or Certified Public Accountant-Personal
Financial Specialist designations. Your planner should complete
continuing education courses as part of his or her ongoing commitment to
competency.
You have the right to be treated fairly
Your planner should treat you the same way he or she would like to
be treated in a professional relationship. This involves clearly stating
what services will be provided and at what price. The planner should
also explain the risks associated with his or her financial
recommendations and any potential conflicts of interest. For example,
does the planner gain personally or financially from your purchase of a
particular product or from the outcome of a suggested strategy?
You have the right to privacy
To get the best results from your financial planning relationship, you
need to divulge relevant personal and financial information to your
financial planner on a regular basis. Your planner should keep this
information in confidence, only sharing it with others to conduct
business on your behalf, at your consent, or when ordered to do so by
the courts.
You have the right to a planner who is professional
Your planner should not provide investment advice or stock brokerage
services unless he or she is properly qualified and licensed to do so,
as required by state or federal law. If your situation requires
expertise that your planner does not possess, he or she should suggest
other professionals who may assist you.
You have the right to a planner who is diligent
Your financial planner should discuss your goals and objectives with you
and explain what you can expect from the relationship before engaging
you as a client. Once the planner has determined that he or she (or his
or her staff and/or network of related professionals) can assist you and
has gathered sufficient information, the planner should make - and, if
appropriate, implement - recommendations that are suitable for you. A
diligent planner reasonably investigates the products or services he or
she recommends. A diligent planner also closely supervises any staff
working with you.
|
Summary
of Your Rights as a Financial Planning Client
|
|
|
Use the following checklist to determine your level of comfort with
your existing financial planning relationship. If you are not satisfied
with your situation, assert your rights by talking to your planner about
your concerns. A competent, ethical planner will seek to understand and
meet your needs and will explain the reasons behind his or her decisions
and actions.
_____ My planner is diligent in carrying out his or her activities.
_____ My planner responds to my phone calls or requests promptly.
_____ Recommendations are appropriate for my situation.
_____ I understand what I'm being charged and why.
_____ I understand and accept my planner's potential conflicts of
interest.
_____ My interests drive the decisions being made.
_____ I'm involved in decisions at the appropriate time.
_____ I do not feel pressured to make certain decisions.
_____ I get adequate information to make good decisions.
_____ My planner investigates the products he or she recommends.
_____ I get the service or products I pay for.
_____ My planner presents his or her qualifications or abilities
honestly.
_____ The staff who works with me is properly supervised.
_____ My information is kept confidential.
|
To Find a Financial
Planner in Your Area
|
|
|
According to Certified Financial Planner Board of Standards Inc. (CFP
Board) research, more than 40 percent of Americans feel that they are
not in control of their finances. If you would like to better manage
your financial situation, a professional financial planner may be able
to help you. Knowing how a planner should work with you, and how you
will be treated as a financial planning client, will put you in the
driver's seat when it comes to taking control of your financial future.
Financial Planning Association
800-282-7526 - www.fpanet.org
National Association of Personal Financial Advisors
888-333-6659 - www.napfa.org
American Institute of Certified Public Accountants/Personal
Financial Planning Division
888-999-9256 - www.aicpa.org
Society of Financial Service Professionals
888-243-2258 - www.financialpro.org
|
To
Lodge A Complaint Against a Planner or Adviser
|
|
|
If you are currently working with a financial planner and are
unsatisfied with the relationship, talk to the planner about your
concerns. If you cannot mutually agree on how to improve the situation,
you may want to find another planner. To lodge a complaint against a
planner, contact one or more of the organizations listed, depending on
which licenses, certifications or designations the planner holds.
Certified Financial Planner Board of Standards, Inc.
888-237-6275 - www.CFP.net/complaint
North American Securities Administrators Association
202-737-0900 - www.nasaa.org
National Association of Insurance Commissioners
816-842-3600 - www.naic.org
National Association of Securities Dealers Regulation
800-289-9999 - www.nasdr.com
National Fraud Exchange (fee involved)
800-822-0416
Securities and Exchange Commission
202-942-7040 - www.sec.gov
|
Learn About Financial
Planning Online
|
|
|
CFP Board's Web site, www.CFP.net/learn,
is a comprehensive resource for financial planning, offering useful
information for visitors at every stage of the financial planning
learning curve. Interactive tools provide help for your personal
situation, including changing jobs, managing debt, planning your
retirement and more. Join the eNewsletter for updates and check back
regularly to participate in polls and quizzes.
|
About
CFP Board
|
|
|
The information in this brochure is provided as a public service by
Certified Financial Planner Board of Standards Inc. (CFP Board). A
nonprofit, professional regulatory organization, CFP Board fosters
professional standards in personal financial planning so that the public
values, has access to and benefits from competent and ethical financial
planning.
The U.S. Securities and Exchange Commission's Office of Investor
Education and Assistance has reviewed this publication. The SEC does not
endorse the commercial activities, products or members of this or any
other private organization.
It's your future. Plan it!SM is a service mark owned by
Certified Financial Planner Board of Standards Inc.
This publication may be reprinted for educational and nonprofit purposes
only.
|
|
|
|
|
Click on the topics below
for more information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
 Welcome
to mymoney.gov, the Federal Government's website dedicated to
helping Americans understand more about their money – how to
save it, invest it, and manage it to meet your personal goals.
Every day, consumers spend money – or do something that
involves money - whether it is balancing a checking account;
shopping for a mortgage or auto loan; researching ways to pay
for a college education; checking credit card statements;
putting money away for retirement; understanding a credit
report; or simply deciding whether to pay cash or charge a
purchase.… the list goes on and on.
You can use the resources on this
site to learn how to do these things and manage your money
better – and we hope you'll share what you learn with others.
This site will grow over time with more information on lots of
different topics – so visit often!
To order a sample of some of the financial publications featured
on this website, you may send for a free "My Money"
tool kit. It has information to help you choose and use credit
cards, get out of debt, protect your credit record, understand
your Social Security benefits, insure your bank deposits, and
start a savings and investing plan. Just click on the Free
"My Money" tool kit link below, fill out the order
form, and we'll be glad to send your "My Money" tool
kit. You should receive your order within three to four weeks.
Thanks for visiting mymoney.gov.
Privacy Policy
WE WILL NOT SHARE OR SELL ANY PERSONAL INFORMATION
OBTAINED FROM YOU WITH ANY OTHER ORGANIZATION, UNLESS REQUIRED
BY LAW TO DO SO.
|
|
Here are books which are available directly from Amazon.com
that may be of interest to you. Click on the title to go directly to Amazon
where you can order with a credit card or debit card.
|
_plans.htm_cmp_blueprnt110_hbtn.gif)
Printer-friendly
version