How Kansas City area women can put together a plan for financial success

Women often face unique financial needs. Building financial literacy, confidence with money and independence can help reduce stress and support informed decision-making.

With a financial plan in place, you’ll be better able to focus on your financial goals and understand what it will take to reach them. The three main steps in creating and implementing an effective financial plan involve:

• Develop a clear picture of your current financial situation
• Set and prioritize your financial goals and time frames
• Implement appropriate saving and investment strategies

Budgeting

Step 1: Creating a budget can help to develop a clear picture of your current financial situation. If you don’t already have one, consider establishing a budget or a spending plan.

• Identify your current monthly income and expenses
• Evaluate your spending habits
• Monitor your overall spending

Start out by adding up all your income. In addition to salary and wages, be sure to include other types of income, such as dividends, interest and child support. Divide your expenses into two categories: fixed and discretionary. Fixed expenses include things that are necessities, such as housing, food, transportation and clothing. Discretionary expenses include things like entertainment, vacations and hobbies.

To help you stay on track with your budget:

• Get in the habit of saving – try to make budgeting a part of your daily routine
• Build occasional rewards into your budget
• Examine your budget regularly and make changes as needed

Setting goals

Step 2: Set and prioritize financial goals.

• What do you want to achieve in 6-12 months (shorter-term)
• Set longer-term goals
• Prioritize goals as must meet, want to meet, dream goal

Strategies and tips to help

Step 3: Implement saving and investment strategies

Once financial goals are identified, it is necessary to determine the amount needed to fund each goal. To evaluate suitable investments for specific financial goals, consider the following questions:

• What is my time horizon?
• What is my emotional and financial tolerance for investment risk?
• What are my cash/liquidity needs?

Once you’ve answered these questions, you’ll be able to tailor your investments, which include savings, to help you target specific financial goals. Seek professional guidance as needed.

Any prudent financial plan should effectively manage both debt and credit. The following are some tips to help you manage your debt:

• Make sure that you know exactly how much you owe by keeping track of balances and interest rates.
• Develop a short-term plan to manage your payments and avoid late fees
• Optimize your repayments by paying off high-interest debt first or take advantage of debt consolidation/refinancing if appropriate

Understanding your credit report is important. A credit report contains information about past and present credit transactions, but it is also used by potential lenders or landlords to evaluate your creditworthiness.

What information are lenders typically looking for in a credit report?

• Timely payments
• Any history of late payments or bad debts
• Number of recent inquiries into your credit report
• Length of credit history
• Percentage use of available credit lines

Because a credit report affects so many different aspects of one’s financial situation, it’s important to establish and maintain a good credit history in your own name. You should review your credit report regularly and be sure to correct any errors you find. You’re entitled to a free copy of your credit report from each of the three major credit reporting agencies once every 12 months. You can go to www.annualcreditreport.com for more information.

Lynn Mayabb, CFP is a Managing Director with Forvis Mazars Private Client and is a member of the Financial Planning Association of Greater Kansas City.

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