Why You Need a Financial Roadmap and How to Build One

Using a financial road map to track your progress is a great way to stay organized and accomplish your financial goals.
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By Haley Tolitsky, CFP

A roadmap is a useful tool to build your own financial plan and track your progress toward your financial and life goals. It allows you to get organized by breaking down the steps needed to achieve your short- and long-term financial aspirations. Having your own roadmap can help keep you accountable and remind you why you are working towards these goals.

Haley Tolitsky

Haley Tolitsky

To create your roadmap, start at “Point A” and evaluate your current financial situation. Understand your balance sheet and monthly cash flow and determine what exactly your financial goals are, such as saving for a home, investing for retirement, establishing your child’s college fund, paying off debt or all of the above. Next, break these goals down into small, achievable steps, creating your “road” to get to “point B” aka where you would like to be financially.

Remember to be flexible with your timeline and reward yourself for your achievements. If you get discouraged or lost, go back to your roadmap and remember your “why,” which could be the opportunity to retire early or work part-time, financially support others or causes important to you, or simply reduce stress around money. Make adjustments as needed to your roadmap along the way as priorities change or challenges arise.

Many financial planners create roadmaps for their clients as a part of their financial plan, but you do not have to work with a planner to create one of your own! Check out this example as a guide to get started.

Financial planning roadmap

Create your own financial roadmap!

Budget

  • Track your income and spending over the last few months using a free budgeting app, such as Mint or PocketGuard.
  • Find areas in your budget where you can cut back on non-essential expenses (eating out, shopping, unused subscriptions, etc.).
  • Determine how much you can comfortably allocate each month toward your short- and long-term financial goals.

Save

  • Save at least 3-6 months of living expenses in a high-yield savings account and possibly more if you have variable income, medical expenses, and/or children.
  • Contribute enough to your 401(k) to get the full employer match (bonus points if you do more).
  • Increase 401(k) contributions every year and consider opening a Roth IRA if you are within the income limitations for additional retirement savings.
  • Create a separate savings account(s) (also called sinking funds) for other long-term financial goals, such as a wedding, down payment, or travel.

Pay Off Debt

  • Check your free annual credit score and look for any outstanding debts that need to be paid off. Work to build your credit score to 700 or above.
  • Pay off credit card debt first while make minimum payments on other debts.
  • Invest for retirement while working to pay down other debt.

Protect

  • Apply for term life insurance if others financially depend on you.
  • Ensure you have adequate disability and home insurance coverage to protect yourself.
  • Meet with an estate attorney to establish your healthcare and financial Power of Attorney documents, Will, and other necessary estate planning records and store them in a secure place.

Each person’s financial roadmap will look different, depending on his or her current stage in life, financial situation and dreams. Keep in mind, this is just an example, so determine your financial priorities and start building out your own roadmap to achieve them. It doesn’t need to be fancy; it just needs to work for you.

About the author: Haley Tolitsky, CFP®

Haley Tolitsky, CFP®, is a CERTIFIED FINANCIAL PLANNER™ with Cooke Capital in Wilmington, NC, providing highly personalized financial planning and investment management services. She is passionate about financial empowerment, specifically for women and the next generation, and loves the opportunity to motivate and guide others to take charge of their financial lives. Haley can be reached at htolitsky@cookecapital.com.

Financial advisory services offered through Acorn Financial Services, Inc. (AFAS), a Registered Investment Adviser. Securities offered through The Strategic Financial Alliance, Inc. (SFA), a registered Broker/Dealer. Haley Tolitsky is a Registered Representative of SFA and Investment Advisor Representative with AFAS. Cooke Capital is otherwise unaffiliated with AFAS and SFA. Supervising office (703) 293-3100. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values Past performance is no guarantee of future results. Please note that individual situations can vary. Therefore, the information presented here should only be relied upon when coordinated with individual professional advice.


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