Financial Planning Checklist: How to Take Control of Your Finances


Whether you’re just about to graduate from college, start building your career, enter married life, or raise your kids, you’ll want to be financially secure and retire at the earliest possible time.

However, what many people don’t realize is that they can’t achieve their financial goals without thorough financial planning. If you have a clear financial planning checklist, you can easily assess your current financial situation, make the necessary adjustments, and eventually gain financial security.

That is why in this article, we will talk about the importance of taking control of personal finances and give you a checklist to help make the process easier, smoother, and less stressful for you.  


What Does Financial Planning Mean?

If you want to realize your life goals, you need a step-by-step process called financial planning. This guides you in managing your finances well, overcoming the possible financial challenges along the way, and finally making your personal goals and dreams come true.


As Benjamin Franklin said, “If you fail to plan, you are planning to fail.” Your personal finances are no exception.


Some of the most common instances where you need careful financial planning include:

  • Preparing for retirement
  • Planning for the birth of a child
  • Managing a business
  • Funding children’s education
  • Experiencing financial distress due to job loss, natural disaster, or severe health condition
  • Dealing with the loss of a family member or spouse

Financial planning also means considering all factors, including the following: 

  • How much money do you have in your savings and checking accounts?
  • What is your monthly income?
  • How much goes to your retirement fund?
  • What’s the status of your personal debts, including credit cards and loans
  • How much is your rent, mortgage, electric bills, and other monthly expenses?  


Creating Your Financial Planning Checklist

To help review your finances easily, take control of them, and stay in line with your goals, following the financial planning checklist below is necessary:


1. Establish Your Financial Goals

The key to setting financial goals successfully is being realistic. Identify your short-term, mid-term, and long-term goals. 

  • Short Term - Start with your short-term goals, such as for the next five years. Are you planning to go on an international trip with family or friends? Do you need to buy a new smartphone or laptop for your studies or work? You might also want to get a new car. Whether you want to create an emergency fund or plan to settle your credit card loans in a specific month, list down all these short-term goals, so you know what, when, and how to achieve them.
  • Medium Term - When setting your mid-term goals, think about all the things you want to obtain in 10 years. For instance, you might want to purchase a disability income insurance or life insurance policy. Then, you might want to relocate to another city, save money for a downpayment on your home, or have enough funds to raise a family and send them to school. 
  • Long Term - Imagine yourself 20 to 30 years from now — what do you want to achieve financially by then? Do you want to retire at the age of 60 or lower? Would you prefer a second home where you can enjoy your retirement? Setting your long-term goals includes finding ways to increase your retirement savings as well as the amount of money you should save to live comfortably during those years. 

Everyone has different circumstances. Take your time and be flexible enough in establishing your short-term, mid-term, and long-term financial goals.


2. Work on Your Debts

Effective financial planning involves managing both different types of debt, including short-term and long-term ones. A significantly lower credit card balance that can be settled within one year and a car loan that’s payable within three years are considered short-term debts.

Meanwhile, student loans and mortgages that you can pay off after 10 or 30 years are what you call long-term debts. It’s generally a good idea to focus on paying off debts with higher interest rates.

Paying only the minimum amount per month will lead to longer years of carrying the burden and suffering from the huge interest.

  • Mortgage - Among the types of debt that Americans face, mortgage debt tops the list with an average balance of around $37,000. Depending on several factors, like the type of mortgage, your current credit score, and the interest rate, refinancing may be a good option for you. At 121 Financial Credit Union, we offer refinancing options for your home mortgage based on your needs and financial goals.  
  • Auto Loans - In 2020, the average individual auto loan balance fell at $19,865 — a relatively high debt amount. That is why it’s best to know all your choices, compare them, and pick the one where you can save more money.  Also, consider whether you need a new car or if a used but functional one will do. Whatever is best for you, we have got you covered with our low-interest auto loans and flexible monthly payment options.
  • Student Loans - Student loan debts can be detrimental to your life and personal goals, including purchasing the perfect home, entering marriage, and having kids. Keep track of the amount you have yet to pay, review the terms, and explore several options that may be beneficial to you, like loan forgiveness. Setting a monthly budget is also crucial in fulfilling your different financial responsibilities. 
  • Credit Card Debts - Reports showed that Americans have an average credit card debt of $6,194. When you have high, unprecedented expenses, like an emergency medical issue, you might end up relying on your credit card, especially if you don’t have enough emergency funds. That is why we at 121 Financial provide personal loan options intended to address your financial needs and priorities.

3. Prioritize Your Family

Major life decisions like taking a new career path, building your own family, raising kids, and purchasing your first home need to be planned well, so you and your family will have a comfortable life. 

Sometimes, unfortunate things happen, like losing a family member from an accident or serious medical condition or getting laid off because of company downsizing. To help you prepare financially for these types of challenges, ask yourself these questions: 

  1. Have you started saving for your kids’ college education? How much of your income is your allocation for their future expenses? 
  2. In case something bad happens to you, can your life insurance coverage help the family absorb the economic heat?
  3. At what age do you and your life partner aim to retire? How are your retirement funds? 
  4. Do you have grandparents, aging parents, or other family members you know you’ll have to support financially by then? 
  5. If you experience a serious illness or encounter an accident that would make you disabled and no longer fit to work, could you still provide your family’s needs with the help of your disability insurance? Have you considered getting accidental death insurance or critical illness insurance?


4. Plan For Your Retirement

Your financial planning checklist wouldn’t be complete without talking about retirement. Start planning and saving for it as early as possible to maximize the benefits of compounding interest and cultivate your investments. 

Then, consider the following:

  • Do you have an employer? If so, maximize your financial benefits, including 401(k). 
  • Are you working for a new employer? Consider rolling over your old 401(k) or to your new account with your new employer. You can also transfer it to an individual retirement account (IRA).

By reviewing your retirement savings plans and assessing the market condition, you can determine your risk tolerance, apply the necessary changes whether that includes your lifestyle, and stay on track with your goals. 

According to a Federal Reserve report, about a quarter of adults in the U.S. do not have retirement savings. However, don't be dissuaded; it's never too late to start saving for retirement.


5. Secure an Emergency Fund

Did you know that over 25% of Americans do not have an emergency fund? If there’s one thing these trying times have taught us, it’s that nothing is permanent, and you have to save for rainy days.

Strive to build three to six months’ worth of emergency funds. This will give you peace of mind knowing that you and your family can get by for several months in case you suddenly lose your job or encounter emergencies.

To build your emergency fund, compute your living expenses. These include your groceries, monthly mortgage payment, and utility bills.

You can start with small but regular contributions using a separate account. Then, increase the amount gradually and automate your savings, so you won’t miss it or be tempted to withdraw the amount.


6. Perform an Annual Review of Your Financial Status

Doing an annual check of the different aspects of your financial situation helps you determine where you are and what kinds of adjustments you have to make.

These include your insurance coverage, investments, retirement accounts, and credit report and score. 

Insurance Coverage

If you’ve had big milestones like getting married or having a baby, reviewing your insurance coverage is necessary.

Even if you may be in a good financial situation today, you still need to explore different insurance policies that will address various elements in your life, including: 

  • Life insurance
  • Health insurance
  • Automobile insurance
  • Disability insurance
  • Critical illness insurance
  • Long-term care insurance 

If you only have automobile or health insurance at the moment, secure your future with your family by getting these kinds of financial protection. Regularly review your beneficiaries as well to avoid potential disputes or other legal issues.



Investments help you build a better future for yourself and your family. Make sure to perform an annual review of several other investments, like bonds, stocks, mutual funds, and real estate. 

Revisit your retirement portfolio as well to see whether the current economic markets match your risk tolerance level. By reviewing your investments, you can easily identify what changes need to be made to fulfill your financial goals.

Need expert advice when it comes to your investments? At 121 Financial, we offer our members complimentary financial planning based on varying needs to help you reach financial security as early as possible.


Credit Report

If you check your credit report and score, you can easily spot any inaccurate information and prevent any suspicious activities in your account. You can understand your credit position too! 

Credit reporting agencies like Experian, TransUnion, and Equifax allow you to get an annual credit report for free. You may also get your credit score from your credit card company.

While an 800 credit score is exceptional, a 300 credit score means very poor. If you have a high credit utilization ratio, expect a low credit score or the amount that you owe divided by your total credit limit. 


Final Thoughts

Achieving economic stability starts with careful financial planning. You need to follow a financial planning checklist to keep track of your finances and see what you have or haven’t achieved.

Start by setting your financial goals. Then, manage your debts, prioritize your family, plan for your retirement, and don’t forget to build an emergency fund. 

Conduct an annual review of your investments, insurance, and other financial information too, so that you’ll know if they still fit your goals.

If you want to ensure you’re on the right track with your investments and financial planning, 121 Financial Credit Union is here to help.

Contact us today to see how our programs and services can help you achieve your financial goals! 

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