16 Tips For Creating A Personal Or Business Financial Plan For The First Time

Whether you’re trying to get a firm grasp of your personal situation or that of your business, financial planning can seem like a tough feat, especially if you’ve never sat down to develop a structured financial plan before. An optimal financial plan lets you look at your current assets, savings and debts and then create goals that propel you forward, no matter your current financial standing.

Expert advice on how to put together an effective plan for the future can be an enormous help. For those who are new to the process, 16 members of Forbes Finance Council discuss their best budgeting and planning tips below. Follow their advice to create an ideal roadmap for reaching your financial goals.

1. Build A Budget Based On Essentials

The first thing I recommend is to calculate your base income per month and immediately deduct 25% to establish a net income. Then, build a budget based on your essentials, with one of your essentials being yourself—try to budget 10% for yourself each time. Recognize that creating a financial plan is no different than creating any other type of plan—it requires discipline and consistency. – Will Tullos, Reliant Mortgage LLC

2. Outline Your Business Goals And Priorities

Clearly identify your business goals and priorities, and budget your expenses to align with those priorities and goals. This budget will serve as a “must-have” plan. Then, work off that to add on a second “nice-to-have” category. This will serve as a guideline on where to deploy your dollars and where you can cut or delay if necessary. – Abdul Naushad, Buckzy Payments Inc.


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3. Create An Estate Plan

Create an estate plan that protects your financial future. Everyone needs estate planning, regardless of age, marital status or net worth. If you pass away without a will, courts decide who inherits your assets and who cares for your minor children, and your estate could lose up to 8% of its value. – Renee Fry, Gentreo, Inc.

4. Add A Buffer In Case You Must Or Choose To Go Over Budget

Build a buffer into your budget. While it’s important to try to stay within your budget, adding a buffer will allow for an extra cushion if there’s a situation requiring you to go over budget. If you’re great at sticking to it and never go over, the cushion will build up, and eventually, you can treat yourself to something nice for being so fiscally responsible. – Sean Frank, Cloud Equity Group

5. Know What You Personally Value

Focus on what you can control. Don’t be misled into thinking that cutting out a cup of coffee is going to solve your financial planning challenges. A budget is a teachable moment and an opportunity for a safe financial conversation about your priorities. What you value should be clear from your financial statements. If you value education, that should be reflected in your budget. – Lawrence Glazer, Mayflower Advisors

6. Understand Your Business’ Past And Your Desired Future

When it comes to business budgeting and planning, the item that I know most do not focus on enough is where they have been and where they want to go. Defining those and the gap between them provides clarity. Then, work to understand your input and output metrics and where to invest in the business to foster success and ultimately reach your goals. – Robert Patin, Creative Agency Success

7. Categorize Your Business Budget

Start by being detailed, then condense the budget into categories. In its final form, a very detailed budget is much more difficult to manage than a categorized budget. Also, while you want a conservative budget so you can maximize efficiency, you don’t want to be so conservative that it is not realistic—otherwise, you and any stakeholders will be consistently disappointed in your unmet results. – Karin Oceguera, Family Education & Support Services

8. Gather Your Team’s Feedback

When devising a business budget, it’s so important to get input from constituents across the company. This helps you as CFO/controller better understand the various sides of the business. It also shows department leaders that you are willing to listen and understand versus dictating a number to them. Finally, it creates accountability with the leaders since they are involved in creating the budget. – Jamie Ellis, Katz, Sapper & Miller

9. Curate A Savings Plan For Unexpected Expenses

A financial plan is not restricted to saving for retirement or investing in the stock market. It also involves planning for future expenses that can sometimes be unexpected, such as caring for an aging parent or navigating unforeseen health issues. Work to create a savings plan for special situations that arise to offset any dramatic disruption to your long-term financial plan and goals for the future. – Charlene Wehring, Wehring Wealth Management

10. Remember That The Process Is What’s Most Important

When you first try to create a financial plan, you have to realize you will fail, and your plan or projections are going to be wrong. But don’t be discouraged—the process is what matters. A financial plan will yield all its benefits during the creation phase, not the execution phase. Have a process for creating your financial plan, because you will need to redo it constantly. – Vlad Rusz, Centaur Digital Corp

11. Base Your Plan On Your Business’ Cash Flow

Build your financial plan based on cash flow. Accrual-based recognition is important for reporting costs and earnings. However, cash flow planning is a powerful tool that clarifies the sources and uses of cash. Can your cash flow sustain operations? Pay your essential bills? Short-term capital or debt is expensive, and good planning can help you manage your cash and avoid costly alternatives. – David Kelley, Mailprotector

12. Take Note Of Other Businesses’ Budgets

When creating a budget for the first time, I’ve had success searching online for others who share their budgets publicly, even if it’s a completely different business. You’d be surprised how many businesses share their templates and their actuals. Examining other budgets, whether in my industry or not, has drawn my attention to many items I may not have otherwise considered. – Julie Fergerson, MRC / Merchant Risk Council

13. Review Your Spending Habits Regularly

It all starts with making smarter choices. Is that extra pair of shoes or espresso shot really worth it? Set a monthly target, evaluate where you stand and review your spending habits regularly. Make sure to set long-term goals, and stay patient through any short-term changes. By applying the power of compounding and exercising self-control, you can save consistently and be prepared for rainy days. – Greg Mitchell, First Tech Federal Credit Union

14. Make Sure Your Advisors Are Working Together

The best tip I can provide is to make sure you have strong advisors around you. Your plan should involve your CPA, an attorney and a strong financial advisor who can be the quarterback of this team. We see it too often: A client’s advisors don’t communicate with each other, and they guide the client down different paths that don’t complement what the client wants or needs. – John King, Dakota Wealth Management

15. Evaluate Your Actual Lifestyle Over The Past Year

It’s imperative to start with a real top-down evaluation of your actual lifestyle over the most recent year. Start with your tax return, so you have all the information on your income and taxes paid. Compile year-end bank account, credit, loan and investment statements to find net additions. This is your savings (or deficit spending). The remainder was consumed, and this is the base for your plan. – Justin Sanderson, Sanderson Wealth Management

16. Balance Your Business’ Current Priorities With Growth Objectives

Make sure your financial plan is balanced between current financial priorities—for example, meeting payroll—and investing for the future—for example, spending money on a new payroll system to support your growth objectives. – Sonia Webb, Avanade

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