5 DIY Steps to Begin Financial Planning

May 19, 2020

Look, as a financial advisor I would love to have everyone and their brother work with me to create a killer financial plan. But as I continue to talk with those in the early stages of planning, I am seeing a couple of common threads (especially among young professionals):

  • Most of us have similar concerns and problems regarding our finances and
  • We live in an increasingly “do it yourself” world

That said, there are a number of steps that you can take that can help put you on the path to early success. So, without further ado here are five do-it-yourself steps to begin financial planning!


  1. Emergency Savings

No, this is not a “sexy” topic but many people that I talk to early in the financial planning process want to jump right into the market and start making money on their money. While I can appreciate their enthusiasm, it is immensely important that you establish an emergency fund to support yourself in case of a disaster (i.e. losing your job or means of supporting yourself). You never want to be “investment rich” and “cash poor” all because, in your excitement, you put the cart before the horse. An emergency fund should comprise no less than 3-6 months worth of your necessary monthly expenses.


  1. Building a Budget


Yes, I know, another boring and unsexy topic but its so important! Building a budget can be a daunting (and humbling) task but it does not have to be. I suggest starting by listing your sources of income and your necessary monthly expenses like your mortgage and utility bills. Then add in the things that are important to you like monthly retirement savings or giving to your church. With whatever cash you have left you can budget in fun activities like going out to eat or taking a weekend off for a mini vacation. There are free tools online that can help you track your spending like Mint[i] or Clarity Money[ii]. If you are a nerd like me and want an excel sheet option for creating a budget let me know and I will send you a copy of my personal budgeting spreadsheet!



  1. Life Insurance

Yikes! This list keeps getting worse! But seriously, if you have people in your life that depend on you for income then life insurance is a non-negotiable. Purchasing life insurance is a bit less “DIY” than the other items on this list but it is a good thing to start planning for. Life Happens, a nonprofit organization educating on the need for life insurance, offers a great online calculator[iii] to help you determine how much life insurance you need. If you find that you need life insurance or additional life insurance over and above what you already have, it is always a good idea to talk to a professional. Your financial advisor can help you through the application process and choosing an insurance carrier that fits your needs.


  1. Contribute to a Company Retirement Plan

Many companies offer a retirement plan as part of their employee benefit package. Oftentimes, this is in the form of a 401(k) or Profit-Sharing Plan. In these types of plans employers often encourage their employees to contribute by offering a matching contribution up to a certain amount usually based on a percentage of your paycheck. For example, your employer may offer to match your contribution dollar for dollar up to 3%. This would mean that if you contribute 3% of your paycheck to the company 401(k) then your employer would add an additional 3% making your total contribution 6% of your paycheck. Make sure to budget enough money for retirement contributions so that you receive the full amount that your employer offers!


  1. Find a Financial Advisor

Alright, so maybe this is cheating but finding the right financial advisor is so important! You want to work with someone that you trust so that you do not need to switch financial advisors somewhere down the line. Not to mention the fact that, according to studies conducted by Vanguard and Morningstar[iv], those who work with financial advisors experience annual returns 3% higher on average than those who do not. When considering who to trust with your hard earned cash it may be a good idea to check out the BrokerCheck[v] tool by the Financial Industry Regulatory Authority (FINRA). All licensed financial advisors are listed on the BrokerCheck registry which lists an advisor’s years in the business, past firms, licenses and disclosures of a disciplinary nature.


                “Alright, enough with the boring financial stuff, where’s our song of the week?” Never fear! This song (actually two songs) was picked with the quarantined soul in mind. So, make yourself a drink, lay back, close your eyes, and imagine yourself sunbathing on a sailboat down in Mexico. Enjoy!

Song 1[vi]

Song 2[vii]





The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.


[ii] https://www.marcus.com/us/en/clarity-money

[iii] https://lifehappens.org/insurance-overview/life-insurance/calculate-your-needs/

[iv] https://www.investopedia.com/articles/personal-finance/102616/how-much-can-advisor-help-your-returns-how-about-3-worth.asp

[v] https://brokercheck.finra.org/

[vi] https://www.youtube.com/watch?v=HVHUjzZZGQ4

[vii] https://www.youtube.com/watch?v=-01jhW_Yzhs