October: Financial Planning Month

Each year in October we observe Financial Planning Month. With the holiday season and the end of the year just around the corner, Financial Planning Month is a great time to step back and take a look at our own financial planning needs.

Steps in the financial planning process

The steps will vary depending upon your situation and your stage of life. Here are some things to consider.

There are a number of things that should go into a financial plan, including:

  • Setting your financial goals
  • Putting together a statement of net worth
  • Budgeting and cash flow planning
  • Retirement planning
  • Establishing an investment strategy
  • Estate planning
  • Tax planning

Once you have done an initial financial plan, it should be revisited and revised as needed over time. Things can change as far as your financial situation and your goals are concerned. For example, you may have gotten married, divorced or become a widow(er). Perhaps you had a child.

Over time things can change. As you age, your risk tolerance may diminish a bit. Investment gains over time can get you closer to your goals and impact how your investments should be allocated. These and other factors are good reasons why you should revisit your financial plan periodically and revise when needed.

Areas that are often updated in revising a financial plan include your investments, your budget and spending plan and the amount needed to achieve a comfortable retirement. Things change over time, both your own situation as well as external circumstances like the markets. Your financial plan needs to be reviewed to ensure that it still reflects your needs and offers a solid path to achieve your goals.

An emergency fund

A key part of any financial plan is an emergency fund. In short, things happen. Many experts suggest that your emergency consists of enough liquid assets to cover 3-6 months of normal expenses in the event of an emergency.

An emergency might be a prolonged illness or a job loss. It could also be an unexpected major repair to a car or your home. Money earmarked for your emergency fund should be held in a liquid account like a checking, savings or money market account where it can be easily accessed. Holding this money in an investment account is generally not suggested as stocks and other holdings can fluctuate in value. You might also incur capital gains taxes when liquidating these assets if held in an investment account.

Budgeting for holiday travel and shopping

As we approach the holiday shopping and travel season, this is an area that you should be budgeting for. For many families, their spending during this time of year puts a hole in the budget for many of the following months. This can include limiting their ability to contribute to their retirement plan or to save for their children’s college educations.

It is a good idea to set aside some money in your budget each month to cover this higher period of spending so you don’t find yourself having to incur interest on your credit cards or straining to cover these costs during this joyous time of the year.

Robert Kennally of the Wedbush Securities Los Angeles office says, “The Kennally Group believes financial planning is bringing the future into the present and making dreams a reality. We encourage you to reach out to your financial advisor to revisit your plan as dreams and realities are ever changing.”

With Financial Planning Month and the end of the year upon us, this is a good time to review your financial plan, or to do a financial plan if you don’t already have one in place. This is especially true as we deal with a stock market decline, inflation and rising interest rates. Contact a Wedbush advisor to help you with your financial planning and investment needs.



These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. The information in these materials may change at any time and without notice.