The essential components of a financial plan

Financial planning early in your career is perhaps the most important thing you can do to make sure you accomplish your personal and professional goals. In fact, the day you leave school would be a great time to start planning. But regardless of your age or career stage, it's never too late to gain value from a hard look at your financial situation and advice from a financial advisor who can help you identify and implement your financial plan. Here are the essential components of a financial plan:

The vision

Identify the goals and objectives that are most important to you and your family, both personally and professionally. Remember, goals and values change with time. Initially, you may be concerned with paying student loan debt. Later that concern may turn to your children's college expenses or a comfortable retirement. The key is identifying what's important to you now and what you'll want in the future.

The assessment

Gather, analyze, and evaluate your financial information to establish a snapshot of your current fiscal situation. After this assessment is made, focus on risk management, making sure you have appropriate insurance. (See "Ensuring That You're Insured" )

The mission

Revisit your personal and professional goals and set concrete deadlines to complete each item. Ideally, you'll develop a plan that manages your risk and shows how you'll accumulate the assets you'll need to meet your goals.

The action

Finally, select and implement the best products and services for your situation. For example, do you need to fund your retirement? If so, a SIMPLE Plan or a 401(k) profit-sharing plan might make the most sense.