Personal Financial Plan Sample: What Should a Plan Include?
A personal financial plan can provide a structured way to organize financial decisions.
The exact format varies from person to person. Someone early in their career may focus on cash flow and retirement savings, while a business owner may need to coordinate business income, taxes, investments, real estate, and a future liquidity event.
A useful financial plan should therefore reflect the person's actual circumstances.
The following personal financial plan sample is educational. It is not a recommendation for any particular individual.
1. Personal Financial Snapshot
A financial plan usually begins with a clear picture of the current situation.
This may include:
Income
Expenses
Cash
Investment accounts
Retirement accounts
Real estate
Business interests
Debt
Insurance
Tax obligations
Estate documents
A balance sheet can help organize these items.
Sample
Assets
Cash: $100,000
Retirement investments: $750,000
Taxable investments: $500,000
Real estate: $900,000
Business interest: $1,250,000
Liabilities
Mortgage: $400,000
Other debt: $50,000
The numbers above are purely illustrative.
2. Cash Flow Plan
The next section can outline money coming in and going out.
A cash flow plan may include:
Employment income
Business income
Investment income
Real estate income
Taxes
Housing
Insurance
Education
Travel
Savings
Investments
Debt payments
For business owners, cash flow may vary considerably from year to year.
That can make a flexible cash flow plan particularly useful.
3. Tax Planning
Taxes can influence many parts of a financial plan.
A plan may identify:
Current marginal tax considerations
Estimated tax payments
Retirement contributions
Capital gains
Business income
Real estate income
Charitable giving
Future liquidity events
Compound Wealth's planning model incorporates multi-year tax planning into broader financial planning for business owners and individuals.
The appropriate tax strategy depends on the individual's facts and applicable law.
4. Investment Plan
A financial plan may include an investment policy describing:
Investment objectives
Time horizon
Risk tolerance
Asset allocation
Diversification
Liquidity needs
Tax considerations
Rebalancing considerations
A financial plan should not treat investments separately from the rest of the financial picture.
For example, someone expecting a major business transaction may have different liquidity and risk considerations from someone with stable employment income.
5. Retirement Plan
A retirement section may answer questions such as:
When might retirement occur?
How much income may be needed?
What retirement accounts are available?
What other assets may support retirement?
How might taxes affect withdrawals?
What happens if retirement occurs earlier or later than expected?
Retirement projections are based on assumptions and should be reviewed as circumstances change.
6. Real Estate Plan
Real estate may be a home, investment, or business asset.
A plan may evaluate:
Mortgage debt
Rental income
Property expenses
Depreciation
Ownership structure
Concentration
Potential future sales
Real estate can also affect estate planning and taxes.
7. Business Ownership Plan
For business owners, the business can be one of the most important parts of the financial plan.
A business planning section may include:
Ownership percentage
Business value
Compensation
Distributions
Concentration risk
Succession
Potential sale
Liquidity planning
Compound Wealth's wealth planning services specifically incorporate business income and business ownership into broader financial planning.
8. Estate and Family Planning
A personal financial plan can also identify estate planning considerations.
These may include:
Wills
Trusts
Beneficiary designations
Powers of attorney
Charitable intentions
Gifting
Family wealth transfer
Legal documents should be prepared with the appropriate attorney.
9. Risk Management
Risk planning can include:
Health insurance
Life insurance
Disability insurance
Property coverage
Liability coverage
Business insurance
The purpose is to identify financial risks that could materially affect the plan.
10. Action Items
The final section of a financial plan should turn information into practical next steps.
For example:
Next 30 days
Review cash reserves and update beneficiaries.
Next 90 days
Review investment allocation and tax projections.
Next 12 months
Evaluate retirement contributions, estate documents, and business planning.
Specific recommendations depend on the individual's situation.
What Makes a Financial Plan Useful?
A financial plan is more than a document.
It is a framework for connecting decisions.
For example, selling an investment can affect taxes. A business sale can affect retirement income and estate planning. Purchasing real estate can affect cash flow and diversification.
That is why integrated planning can be useful for people whose finances involve several interconnected areas.
How Often Should a Financial Plan Be Updated?
A plan may be reviewed periodically and whenever major circumstances change.
Examples include:
Marriage
Divorce
New child
Business formation
Business sale
Inheritance
Retirement
Real estate purchase
Significant income change
Market changes alone may not require a complete financial plan rewrite, but they can be a reason to revisit assumptions.
Final Thoughts
A personal financial plan sample can provide a useful framework for understanding what a thorough plan may contain.
The key sections generally include financial position, cash flow, taxes, investments, retirement, real estate, business ownership, estate planning, risk management, and action items.
The most useful plan is one that reflects the person's actual circumstances and connects individual decisions to broader financial priorities.
Frequently Asked Questions About Personal Financial Plan Samples
What should a personal financial plan include?
A financial plan may include cash flow, assets, liabilities, investments, taxes, retirement, insurance, estate planning, business interests, and specific action items.
Can I create my own financial plan?
Yes. Basic financial planning can begin with organizing income, expenses, assets, debt, investments, and goals. More complex situations may benefit from professional guidance.
What does a simple financial plan look like?
A simple plan may include a net worth statement, monthly cash flow, emergency reserves, investment strategy, retirement savings, insurance review, and estate planning checklist.
What is included in a financial plan for a business owner?
A business owner may need to include business value, compensation, distributions, taxes, ownership concentration, succession, liquidity, and personal wealth planning.
How often should a financial plan be updated?
It can be reviewed periodically and after major life or financial changes.
Does a financial plan include investments?
It often includes an investment strategy, but investments are generally considered alongside cash flow, taxes, risk tolerance, time horizon, and other financial needs.
Should taxes be part of a financial plan?
Taxes can affect investments, retirement, business income, real estate, and estate planning, so tax considerations are often part of broader financial planning.
What is the difference between financial planning and wealth management?
Financial planning addresses broader financial decisions and goals. Wealth management may combine planning with investment management and other services. Definitions vary by firm.
Can a financial plan include real estate?
Yes. Real estate may affect cash flow, taxes, diversification, debt, and estate planning.
How do I turn a financial plan into action?
A plan can be organized into prioritized tasks with timelines, responsible professionals, and periodic reviews.
If You Have Any of These Questions, Contact Compound Wealth
What should my personal financial plan include?
How can I organize my financial information before creating a plan?
How should taxes fit into my personal financial plan?
How can I include a privately held business in my financial plan?
What should I consider when building an investment plan?
How should real estate fit into my financial plan?
How can I coordinate retirement and tax planning?
What estate planning information belongs in a financial plan?
How often should I review my financial plan?
What should I do if my financial situation changes significantly?
How can a financial plan account for irregular business income?
How should I plan for a future business sale?
What information should I bring to a financial planning meeting?
How can accounting information improve financial planning?
How can tax, investment, and business decisions be coordinated?
About Compound Wealth
Tax planning often intersects with investment decisions, business ownership, retirement planning, and other financial considerations. Compound Wealth provides an integrated approach that combines tax planning, wealth management, accounting, and business transition services to help clients evaluate financial decisions from multiple perspectives as part of an ongoing planning process.
