The Novice’s Essential Guide to Life Planning

Financial planning takes a holistic approach. It considers your interests and security needs as well as those of the ones you love. Financial life plans are not just about the money. They’re also about your quality of life and the peace of mind that comes when you have safety nets set in place for the bumps along the way.

Estate Planning

Everyone needs an estate plan. Your plan can be basic and consist of only a general last will and testament, advanced directives (aka a living will), and a health care power of attorney, or it can be complex and include a life insurance trust, a revocable trust, and tax considerations. 

No matter what financial situation you’re in, you should invest in a quality attorney and financial planner to help you determine a path that is right for you. Instead of relying on state laws and courts to dictate your decisions, an adequate estate plan will allow you to determine where your assets go, make sure you are in charge of your end-of-life decisions, and pre-determine who you trust to make decisions on your behalf.


Planning for the worst case scenarios will ultimately save you time, trouble, and steep costs. Most people have health insurance, car insurance, and homeowners or renters insurance, but stop there. The following insurance plans can make a world of difference for you and your loved ones:

  1. Life Insurance – It prepares your family for financial success should you or your spouse die. Rates are based on your health and age. You can use an online calculator to help determine rates.
  2. Disability Insurance – Long-term and short-term disability insurance not only covers medical costs in the event you are unable to work but also covers lost income.  Disability insurance rates are also based on age and health but are relatively low-cost compared to the cost if a disabling event does occur.
  3. Burial Insurance – Burial insurance plans range from $5,000 to $25,000 dollars, and cover burial and funeral home expenses. These plans relieve your grieving loved ones from having to come up with the funds.

Retirement Planning

Retirement planning is difficult because there are so many rules and so many unknowns, like:

  • Inflation
  • Costs for healthcare
  • When you will want/need to retire
  • Taxes

While the unknowns make retirement planning daunting and complicated, it’s important to have a plan for building wealth and to prepare for the time when you can’t work anymore. Start by finding ways to invest into a 401(k) or IRA. This may require cutting spending now, but you’ll be thankful you made the sacrifice. Other options to consider are stocks, bonds, or a health savings plan.

Planning For Your Children

Every parent wants to set their children up for success, provide for them and give them all the best opportunities. Start your financial planning by making sure you have your estate planning, insurance, retirement, and investments in order so that you don’t leave your children with financial burdens and debt. After you have yourself taken care of, then you can start saving by doing the following:

  1. Opening a 529 college savings plan – Use whatever extra funds you can come up with, which will ultimately add up and make a huge difference
  2. Opening an Education Savings Account (ESA) – An ESA allows you to save $2,000 a year per child, which grows tax-free and has a variety of investment options.
  3. Getting your kids involved – Teach your child what it is to save, invest, give and spend.  Teaching them how to manage money is the best financial planning gift you can give them.

Financial planning is for all people. A financial plan helps you feel secure, and it sets you up to pursue and achieve your dreams. Establishing an estate plan allows you to determine where your assets go and plan for end of life decisions. Insurance prepares for the worst case scenarios, while retirement planning makes sure you live your best life and relieves your loved ones from having to care for you during your golden years. Finally, setting your kids up for financial success will bring you peace knowing they are taken care of.

Photo Credit: Pexels

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