Gathering Data for your Financial Plan

Alexandra Armstrong: Hi! I am Alexandra Armstrong and I am a member of the Financial Planning Association. I am here to discuss the basics of financial planning. Right now, I am going to talk about gathering data to create your financial plan. First, gather your financial records. The four essentials are pay statements, printout of your bank statements, printout of your credit card statements and last year's income tax return. If you have investment income you will also receive statements from your bank, mutual fund company, brokerage firm or other financial institution at the end of the year, collect them as well.

Other items you should consider when gathering data are income, expenses, assets, and liabilities. Income items will include current pay statements, investment income, any other income you might receive such as alimony, trust income, business income. Tax returns may help remind you of other income you have received. The expenses really divide themselves into two categories, the first would be fixed and the second would be discretionary. Fixed are the ones you know you have to pay each month for instance your mortgage, your real estate taxes, your car payments, your insurance payments such as car, life, health, tuition payments. Discretionary ones are little harder to calculate what you have. Had it be your grocery bills, what you spend at the drug store or dry cleaning excreta. If you don't know what these are and not many people know it, keep a record for a few months and then you can determine how much you spend each year.

Under the assets you want to put down what you think your home is worth, if you have a second home what it is worth, any investment property, your bank and savings accounts, your investments, your collectibles and personal property, automobiles and other vehicles you might own. And then you need to put down what you ow. What's due on your mortgage, how much you owe on your credit card, loans such as an auto loan, college loan, family loan, business loans.

A qualified financial planner is the best person to address any questions or issues you might have with your financial plan. To begin your search ask for names from friends or colleagues you may have used a financial planner. Or you can visit planner search at www.

plannersearch.

org. These are just some suggestions of what data to collect. Next let's talk about analyzing and evaluating your financial status.