Your Financial Plan—A Roadmap for Life’s Ups and Downs

Your Financial Plan—A Roadmap for Life's Ups and Downs

Key Takeaways

    Learn five tips to build a financial roadmap that strives to help guard and grow your assets for the future

    Set your financial goals, stick to a financial plan, and revisit your plan regularly to see if any adjustments need to be made due to changing circumstances

When planning a road trip, you want to take the most direct path to your destination. So like many people, you probably use a GPS to map out your route and minimize delays. You can use this same approach for managing your finances.

A financial plan is like a GPS for life. It can help you navigate the twists and turns on the path to financial well-being.  

Here are five simple ways to build a roadmap that strives to help guard and grow your assets for the future. 

1. Open and Fund Accounts

Checking and savings accounts are the foundation for most financial plans. And while they have many similarities, they serve different purposes. Money in a checking account is usually earmarked for bills and other expenses. You can also use the account to help manage your budget. Debit card transactions and canceled checks are an easy way to track and evaluate your spending habits. 

Savings accounts are generally used as a rainy day fund—a way to accumulate money for unexpected events (e.g., medical bills) and large purchases. The amount you should have in reserve depends on your needs and goals. Many financial professionals suggest having a cushion of three to six months of expenses saved for emergencies. If the need arises, you can easily move money from your savings account to your checking account to make a payment.   

Keep in mind, interest rates, fees, and account features vary. Be sure to shop around to find the checking and savings accounts that work best for your situation.   

2. Contribute to a Retirement Plan

Saving for retirement is usually an essential part of any long-term financial plan. The goal is to have enough money to live comfortably after the paychecks stop. If you’re not already, consider participating in your employer’s 401(k) or 403(b) plan. It’s an easy and convenient way to prepare for the future. You pick a contribution amount you’re comfortable with (even small amounts add up over time), and then it’s automatically deducted from your paycheck and invested in your retirement account. Make sure and take advantage of your employer’s contribution match if it’s offered. If your employer doesn’t offer a plan or you want to maximize your savings, consider opening a traditional or Roth IRA. 

3. Build a Positive Credit History

Your credit history impacts almost every large financial decision you make, such as an apartment lease, first home, or new car. Banks, landlords, and finance companies will check your credit history as part of the approval process. They want to make sure you’ll be able to meet your obligations. Employers may also review your credit history before making a job offer.      

Paying your bills on time and keeping credit cards in check can help you build a strong credit score. You should also monitor your credit history on a regular basis for inaccuracies and potential identity theft. The time to uncover an issue is before you want to make a purchase. By law, you’re entitled to one free credit report each year from each of the three major credit bureaus. You can easily access them at Consider spreading out your requests, for example, one every four months. That way, you can check your history three times a year. 

4. Protect Yourself: Get Insured

What would happen to your family if something happens to you? How long could they cover monthly expenses and other obligations? A life insurance policy may help relieve some of the financial stress of losing a loved one.      

You might also consider homeowners or renters insurance to protect your home and the things inside it. These policies may help you rebuild or replace personal belongings lost due to robbery, fire, or other hazards.

Like checking and savings accounts, you’ll want to shop around for the insurance coverage, premiums, and deductibles that work best for your situation.         

5. Create an Estate Plan

A common misconception is that estate plans are only for the wealthy. The truth is legacy planning may be an essential part of every financial plan. Having a will or trust helps ensure your assets will be allocated the way you want after your death. Designating beneficiaries for your retirement accounts and life insurance means these assets will pass directly to the individuals you’ve selected. Make sure you review your will and beneficiaries, and update as necessary, whenever you experience a significant life event (e.g., marriage, kids, divorce).

Because Life Happens

Its generally a good idea to set financial goals, stick to a plan, and revisit it regularly. But if you find yourself short on time, or you’re not sure where to start, consider Essential Portfolios from TD Ameritrade Investment Management, LLC. Its an automated low-cost investment solution that can help you pursue your goals.

When you sign up, you’ll be asked a few questions about your target, timeline, and risk tolerance. You’ll then get a portfolio recommendation based on both your answers and your financial goals. The model portfolio is then automatically reallocated and rebalanced as needed.

As much we would hope, the path to financial well-being is not always smooth. But having a financial plan may help you manage any bumps in the road.

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*Managed portfolios are offered by TD Ameritrade Investment Management, LLC.

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