5 Free Professional Financial Tips Everyone Can Use

What are some of the most important financial planning tips everyone can use, and some of your most financially savvy friends are using right now? 

Creating a financial plan is by far the best way to reach your financial goals, and it does not need to be expensive. Everyone’s financial circumstances are different and there is a lot you should be thinking about. HIGHLAND Financial Advisors have come up with their top 5 most important financial planning tips that anyone can use, for free. 

I challenge you to get these important financial steps completed in one week. This will give you a better chance of reaching your financial goals. Take out a pen and paper and write these steps down and then cross them off after each one is complete. Let’s get started.

1) Understand your Expenses

We often think we only have control over our discretionary spending like entertainment, dining out, or buying high priced luxury goods. But when was the last time you took a long hard look at your cable bill – do you really need the Ultimate Deluxe package with 2,500 channels? When was the last time you received new quotes for your property and casualty insurance? Or, are you still paying an ongoing monthly fee for a gym membership you no longer have time to use?

For example, assume you took our advice and found opportunities to save without sacrificing your current lifestyle:

  • Downgrade cable package: $25/monthly savings
  • Update property and casualty insurance with current/new insurer: $75/monthly savings
  • Cancel unused gym membership: $50/month savings

Total monthly savings: $150/month

It doesn’t sound like much, but $150 per month adds up to about $1,800 per year in savings. Assume you deposited your new found $150 every month into a 529 college savings plan for your child or grandchild – the $150 savings per month could accumulate to about $25,000 over 10 years assuming a 7% annualized return.

2) Review your Retirement Savings Plan

In the last quarter of every year the IRS announces cost of living adjustments on 401(k) and retirement plan limits. Some of the retirement plan limits have been increased in 2015, specifically the 401(k), 403(b), 457, and Simple IRA plans.

If you maxed out your retirement plan in 2014 and plan on doing the same in 2015 make sure your employee deferrals coming out of your paycheck will meet the maximum limits before the end of the year. You don’t want to accidentally underfund your retirement plan.

If you have not started saving for retirement – start small and get automated! By saving in smaller increments every pay period you can start building your nest egg for the future while minimizing the strain on cash flow. 

Here is a summary of the following key retirement plan figures for 2015 and what they were in 2014:


Here are a couple quick examples on how to max out your IRA or 401(k):

The max contribution in 2015 for your Traditional or Roth IRA is $5,500. You can max out your savings in 2015 by saving about $106 every week or about $459 every month!

The max contribution in 2015 for your 401(k) is $18,000. You can max out your savings in 2015 by saving about $750.00 every pay check if you get paid 24 times per year or about $693 if you get paid 26 times per year!

3) Assess your Goals Both Long and Short-term

Not sure where to start?

George Kinder, founder of the Kinder Life Planning Institute, started Lifeplanningforyou.com which is a free series of questions and exercises that help focuses on helping people clarify their goals, values, and priorities before planning their finances. Reed Fraasa, founder of Highland Financial Advisors, LLC is a Registered Life Planner through the Kinder Institute and our clients have found the questions and exercises valuable in discovering what is most important to them. The website was recently featured in a Wall Street Journal article where George explains the goal of the website: “To lead people to a deeper and deeper understanding of what’s most important to them.”

Long-term goals are easy to plan because usually they don’t involve much work today. Short-term goals however usually require action today, and those goals are the ones that often fall by the wayside. Write down what you want to accomplish this year, and the first step you will need to take to accomplishing that goal in a journal. For example, you want to take a family vacation this year. So just don’t write down a general statement like “2015 Family Vacation” – where is the call to action? 

Try something like this instead:

Goal: 2015 Family Vacation

Decide on a location and three potential travel weeks during the months of July and August to propose to family – Deadline: Feb. 28, 2015

Keep this journal of goals somewhere handy and try to look at it at least once per day to keep it on your mind.

4) Review your Legacy Plan

An annual legacy plan check-up is important because life is a moving target full of constant change which in some cases may prompt a need to revisit your planning.

Here a few changes that may affect your plan:

  • Changes in Family
  • Divorce or death of a spouse
  • Purchasing or refinancing a home
  • New accounts
  • Dependent changes like the birth of a child, adoption, or a new stepchild.

Whether or not any of the above applies to you it is recommended you review all of your beneficiaries on your retirement accounts and life insurance policies at least once a year. You should also examine your estate documents to make sure they are up to date allowing you to maximize any estate tax exemptions available to you, and also all appointees are up-to-date and in line with your wishes. 

5) Check your Credit Score and Reports

If you have not been periodically monitoring your credit – you should start now. Why? By making sure your credit reports are accurate you can avoid the potential risk of being denied credit or denied the most favorable terms on a loan. Identity theft and cyber security have become a major concern and by periodically reviewing your credit report you can monitor for any suspicious activity. Here are two FREE resources to help monitor your credit:

  • By clicking this link to the NAPFA (National Association of Personal Financial Advisors) website and following the instructions to create a free Credit.com account you can obtain a free Experian credit score, along with an estimated FICO and Vantage score. The reports are updated once every 30 days and you can log-in at any time to access your report. Annualcreditreport.com>
  • The Fair Credit Reporting act made it mandatory for each national credit reporting agency, Equifax, Experian, and Transunion to provide you with a free copy of your credit report once every 12 months. By clicking this link to the Federal Trade Commission website and following the instruction to create a free account at annualcreditreport.com you can obtain the three credit reports for free. Our recommendation is to obtain only one of the reports every four months so you can make sure you have constant monitoring throughout the year.

Like anything else the biggest hurdle to accomplishing anything is taking the first step – so start planning!

If you run into road blocks or still feel overwhelmed by your financial situation take action and look for a local financial advisor using the NAPFA Find an Advisor search. The National Association of Personal Financial Advisors (NAPFA) is the country’s leading professional association of fee-only financial advisors and highly trained professionals who are committed to working in the best interests of those they serve. 

What's next? Sign up for our weekly newsletter to gain financial confidence with new topics each week on our clients most asked about topics.

The author of this article, Edward J. Leach CFP®, MBA is a member of the National Association of Personal Financial Advisors (NAPFA)