It’s easy to hear the word “financial planning” and dismiss it as something you don’t need until you’re wealthy, but what if I told you that it’s something you need in order to become wealthy? Now I have your attention. And what if I told you financial planning only takes a few steps—and that you’re mostly likely overestimating the actual work it takes to create a plan? Keep reading to uncover the lazy girl’s guide to financial planning in 5 simple steps.

I get it—getting your finances in order can easily fall to the bottom of your to-do list week after week. As women, we’re always juggling a lot (anyone else have 3 jobs?) and the thought of hiding under a rock at least once a week is only natural. I’ve been there. I’ve given myself all the excuses and I trained myself to believe these stories for many years.

“I don’t have enough money to save right now.“

“My life is too simple for a financial plan.”

“When I get that promotion, I’ll tend to things.”

Or the tried and true…

“I’ll get to it next week.”

But the reality is this: we make this task of getting financially organized out to be a bigger, much cumbersome task than it actually is. And I’m here to tell you that starting small is 100x better than not doing anything.

I had the privilege of having a brother and father as financial advisors when I entered the work force. When Dustin told me to fork over some savings so he could invest it for me, I obeyed. The result? Whatever I had scraped together back in the 2000s has now more than quadrupled. And now that I’m finally hitting my career stride (read: able to put more money into savings & investing), I have a little head start.

If you just read that and got discouraged because you didn’t start saving in your 20s, here’s the thing…it’s never too late to start! If you were to start this year, you could be in the same position in a few years. Then you’ll look back and say, “I’m so glad I started back in 2018! Galleee, time sure does fly.”

This not only goes for saving, but it also goes for things like estate planning and everything else you need for a cohesive financial plan. If you’re like me and juggling a FT job, a side hustle, studying, a family, etc. (the list goes on and on for us modern women who want it all!) then let me break it down for you.

1. Develop your Vision

This is the fun part. You know how everyone is always going on and on about goals? Well those are important, but developing your vision goes way beyond goal-setting. This is where you dig deep and identify what your exact vision is for your life. We have an entire episode about how to develop your personal Vision. This is not only the first step, it’s the most important step because everything else in the plan depends on what your Vision is.

Dreaming up and documenting your Vision can seem pretty intimidating/daunting, but have no fear…there are actual exercises and questions that you can fill out to guide you. We went ahead and organized them and put them in our Develop Your Vision Worksheet for you to download so you can get started right away. I’m sure your mind is already racing!

Download your Vision Worksheet

2. Create & Automate Your Savings System aka The Bucket Strategy

There are 3 buckets you need to fill:

• Short Term – These are your emergency funds, which everyone needs. Consider your bucket filled when you have 3-6 months of living expenses saved up. This bucket is very important because not having emergency savings can dramatically mess up your financial plan, i.e. if you need money in a pinch (taxes, flooding, broken A/C) you don’t want to have to pull out of your retirement savings or your vacation funds. You need to plan for the unexpected, which means you need savings to support you during the times life doesn’t go perfectly.
• Intermediate Term – These are your larger expenses like saving up for the down payment on a home or new car, vacations or anything else that you will need a large sum of money for in the near future.
• Long Term – This is your retirement savings (IRA, Roth IRA & 401(k)). With traditional pensions disappearing, younger generations will be required to fund more of their retirement through 401(k)s and other retirement plans—which means we have to figure things out on our own. In addition, a lot of us who work for small businesses or are entrepreneurs don’t have access to 401k’s so you have to take the extra step and set up an IRA for yourself…which leads to the next step. I highly recommend you listen to episode #4 (How Much Should You Be Saving) and episode #13 (Financial Planning for Creative Entrepreneurs) of our podcast Worth It for more specific advice on how much to save and how to set up your bucket system, whether you’re an entrepreneur or not.

3. Start Investing

Ok, so here’s the bad news: investing can be scary and intimidating. But the good news is three-fold:

• there is more information than ever before out there to help you comprehend how investing works (get your head out the sand, gurl!)
• there are more ways to easily set up an investing account than ever before 
• here’s the best one…women are actually better investors than men! And here’s how we know so.

If you’ve already started investing, whether it’s through a 401(k), an IRA or an online investing account, KUDOS to you! The next step is making sure you’re in the appropriate investments that align with your time horizon, risk tolerance and unique goals. If you’re a savvy girl, more power to you if you are confident to make those decisions on your own. For those who prefer a little more guidance, it may be time to consider hiring a financial advisor or planner. 

Choosing Your Personal Finance Professional: Financial Coach, Financial Advisor or Financial Planner: Which Should You Use? 

4. Take Inventory of Your Insurance

I’m talking about the insurance that protects you and your family in case of tragedy and old age, which is life, disability and long term care. The main takeaway is this: you only need enough insurance to cover what your “needs” are, which is different for every person/family. Ask yourself, “what will they lose if I pass?” Tally up your income, debt (mortgage & student loans), future education needs, weddings, etc. Life insurance becomes an elevated priority when children come into the picture. 

The most common mistake with insurance is paying unnecessary premiums for insurance that you don’t actually need. Do your homework and listen to our podcast episode that tackles insurance planning in detail. I will leave you with this: be weary of stand alone commissioned brokers trying to sell you policies without explaining why you need it. Find a trust-worthy insurance rep that has your best interest at heart.

5. Get these 5 Basic Estate Documents Made

Believe it or not, you have an estate. In fact, nearly everyone does. Your estate is comprised of everything you own— your car, home, other real estate, checking and savings accounts, investments, life insurance, furniture, personal possessions and even your social/online property. And (spoiler alert!) you can’t take it with you when you die.

Estate planning, which is another word for death or disability planning, is for everyone. The purpose of an estate plan is to ensure your wishes are carried out. You need to provide instructions stating whom you want to receive something of yours, what you want them to receive, and when they are to receive it. And you want this to happen with the least amount of taxes, legal fees, and court costs…this is what estate planning can do for you.

The first and simplest step is also free. Designating a beneficiary (the legal term for someone who will inherit assets from you) on all of your retirement accounts needs to be at the top of your priority list when it comes to estate planning. Check your 401(k)s, IRAs, life insurance policies and annuity contracts, and make sure there is a designated beneficiary on each one of these accounts–you can typically do this online. If you’ve already done this, then maybe now is a good time to review them to make sure everything is still as you want it. 

There are 5 basic estate planning documents that you should look into. The first 4 usually apply to everyone, and the last one may only apply to some.

• Will – A will simply provides instructions for distributing your assets to your family and other beneficiaries upon your death. The other crucial part of a will is designating a guardian for your minor children, if you have them.
  
• Durable Power of Attorney – A power of attorney is a legal document in which you name another person to act on your behalf in case you become incapacitated.
• Health Care Power of Attorney – A durable power of attorney for health care authorizes someone to make medical decisions for you in the event you are unable to do so yourself.
• Living Will – A “pull the plug” type of situation, it expresses your intentions regarding the use of life-sustaining measures in the event of a terminal illness.
• Revocable Living Trust – A revocable living trust is one type of trust often used in an estate plan. By transferring assets into a revocable trust, you can provide for continued management of your financial affairs during your lifetime (when you’re incapacitated, for example) or at your death and even for generations to come. It also enables trust assets to avoid probate and it reduces the chance that personal information will become part of public records.

This may seem like a lot at first glance, but when you find a trust-worthy and affordable estate planning attorney, it can be done fairly quickly and affordably. You can most likely knock all of them out in 1-2 sittings with your attorney. Go into your first meeting prepared–you should already know what you want in your will, etc. so you’re not paying him or her to help you brainstorm. If you need a little more understanding of estate planning, be sure to check out our basic estate planning episode.

That completes your Lazy Girl’s Guide to Financial Planning. Easy peezy, right? Tackle these steps one at a time and give yourself a reasonable timeline to complete them. The goal is to have a clear plan in place so you can get back to doing what you do best (which is not worrying about setting up your financial plan!)

All jokes aside, a solid financial plan can give you a whole lot more than peace of mind. It can give you the time, freedom, systems and clarity to make your money work for you and not the other way around. In other words, a financial plan can pave the way for a wealthier, more ideal life that you want and deserve.

Subscribe to Worth It for more weekly discussions and tips on how to get your finances in order so you can start living your ideal life now. And don’t forget to download our free Vision Worksheet if you’re ready to take the first step in our Dream.Plan.Live. Life Plan process. We’ve designed it so you can write down your goals and map out how to get there all in one place.