Subscribe
Share
Share
Embed
Retire With Confidence is the podcast designed to help you move beyond the fear of the complexity of finances so you can be financially free to achieve personal significance. Tune in with Josh Duncan each week to turn fear into fuel that drives you into Freedom & Significance.
Have you ever felt like you're doing all the right financial things, saving for retirement, paying down debt, maybe even investing, but you still wonder, am I actually on the right track? You're not alone. Most people don't have a clear picture of where they are financially or where they're heading. They've got pieces of the puzzle, an IRA here, a mortgage there, some insurance, but no big picture tying it all together. That's where a personal financial roadmap comes in.
Josh:In today's video, I'm going to walk you step by step through how to create your own financial roadmap. One that helps you understand exactly where you stand, what's most important to you, and how to confidently move toward your version of financial freedom. Here's what we'll cover. First, how to identify your values and define what financial success really means to you. Two, how to take an honest snapshot of where you are today.
Josh:Three, how to set meaningful prioritized goals. And four, how to build a plan to bridge the gap between where you are and where you want to be. Five, how to keep your roadmap relevant because life never stops changing. By the end, you'll understand how to make your money serve your life, not the other way around. Here's the truth.
Josh:Before you can build a roadmap, you have to know your destination. Too often, we jump straight into tactics, budgeting, investing, tax strategies without asking the most important question. What's the point? Money by itself isn't the goal. It's a tool, a resource that helps you live out your values.
Josh:So step one in building your road map is clarifying your why. Let's do a quick exercise. Ask yourself three questions. Number one, what does an ideal day look like for me both now and after achieving financial freedom? Are you spending time with family, traveling, volunteering, working on something meaningful?
Josh:Number two, what would I regret not doing with my life if I didn't take action now? And number three, what do I want my money to make possible for myself, my family, and my community? Write your answers down. Don't rush it. These questions reveal what financial freedom really means to you, whether that's independence, generosity, flexibility, or peace of mind.
Josh:Here at F5 Financial Planning, we start with a values exercise, helping clients identify their top values. Common examples, family, health, faith, freedom, growth, and generosity. Once you know what you value most, you can align your goals and spending around those priorities. For example, if your top value is family connection, your goal might not be retiring early. It might be creating more margin in your schedule now to spend time with your kids.
Josh:If your value is security, maybe that means building a strong emergency fund and paying off debt before focusing on investing. The road map you select is not someone else's version of success. It's yours. So step one, define your destination through your values. Now that you know where you wanna go, you need to know your starting point.
Josh:Think of it like using GPS. You can't get directions until the app knows where you are. This part can be uncomfortable, but it's essential. You're going to create a personal financial inventory, a clear picture of your assets, liabilities, income, and expenses. Let's walk through it.
Josh:First, your assets. That includes everything you own with value. Checking and savings accounts, retirement plans like four zero one k's and IRAs, brokerage accounts, real estate, vehicles, and business interests. Write down the balance or estimated value of each. Next, your liabilities.
Josh:These are your debts, mortgage balances, student loans, car loans, credit cards, and any personal loans. Now subtract your liabilities from your assets. That gives you your net worth, a snapshot of your overall financial position. Next, take a look at cash flow. Track your income and expenses for a few months.
Josh:Be honest about where your money goes. You might wanna use a tool like Monarch Money or You Need a Budget to help with us. Remember, every dollar you spend tells a story about what you value, whether intentionally or not. Maybe you're spending $1,200 a month eating out, but only saving 200. It's not necessarily wrong, but it's worth asking.
Josh:Does that pattern reflect your values and goals? When you know what's coming in and what's going out, you'll see whether you have a surplus or a deficit each month. Finally, review your protection plan, insurance coverage, wills, and powers of attorney. These are your safety nets. When you combine all this, your assets, debts, cash flow, and protection plan, you've got a clear snapshot of your financial reality.
Josh:That's step two, know where you are today. Now that you know where you are and where you wanna go, the next step is deciding how to get there. This is where we turn values into action by setting financial goals. But not all goals are created equal. Some are short term, like paying off credit cards or saving for vacation.
Josh:Others are long term, like funding college or financial freedom. The key is to set goals that are specific, measurable, and value aligned. Here's an example. Let's say your value is freedom, and your dream is to leave your corporate job and start a business in five years. Your goal might be save $100,000 in startup capital over the next five years, while maintaining an emergency fund of six months expenses.
Josh:That's specific, measurable, and tied to your value of freedom. Or maybe your value is security, and your goal is to pay off your mortgage in ten years instead of thirty. Both goals are valid because they each match your priorities. Now to organize your goals, think in three time frames. Short term, one to three years.
Josh:These are emergency funds, credit card payoff, saving for a car. You got midterm, three to ten years, college funding, home purchase business goals. And then you've got long term, ten years or more. These could be retirement, legacy, financial independence. Once So you've listed your goals, prioritize them by timeframe.
Josh:Ask yourself, if I could only accomplish one of these, which would it be? That question brings clarity fast. A common mistake I see is trying to chase too many goals at once. That dilutes your progress and your focus. A good roadmap focuses on a few key objectives at a time, then adjusts as life evolves.
Josh:So step three, set clear, prioritized, value aligned goals. Now we're ready for the heart of your financial roadmap, the action plan. This is where strategy needs execution. You know your why. You know your starting point.
Josh:You know your goals. Now it's time to connect the dots. There are five key elements that make up your road map. Cash flow management, risk management, investment, tax investing, excuse me, tax planning, and estate planning. Let's unpack each one briefly.
Josh:First, cash flow management. Think of the cash flow as the engine that powers your financial plan. Start by making sure your spending aligns with your goals and values. A simple structure is the fifty thirty twenty rule. 50% of your income goes to the needs, things like housing, food, and transportation.
Josh:30% goes to once, lifestyle and leisure, and 20% goes to savings and debt repayment. Now your ratios might look different, especially if you're saving aggressively for financial freedom or paying down debt. The key is being intentional. Build a cash reserve of three to six months expenses for emergencies. And if you're self employed or have variable income, aim for six to twelve months.
Josh:Once your foundation is solid, direct your surplus cash towards your top priorities, whether that's investing, debt reduction, or major life goals. Second, risk management. This is your protection layer because life doesn't always go according to plan. You can have the best investment strategy in the world. But if a major life event hits and you're not prepared, it can undo years of progress.
Josh:Review your insurance coverage. This is health insurance. Understand your deductibles and coverage limits. Life insurance, protect your family's future. Disability insurance, which is replacing income if you can't work.
Josh:Home and auto, check your liability limits, and an umbrella policy for extra protection. And don't forget your estate documents, trusts wills, powers of attorney, and health care directives. These aren't just for the wealthy, they're for anyone who wants to protect their family from confusion and stress. Third, investing. Investing is how you grow wealth and make long term goals achievable.
Josh:But here's where people often go wrong. They chase returns instead of following a plan. Your investments should match your goals, time horizon, and your risk tolerance. For example, money you'll need in the next three years belongs in cash funds. Midterm goals, five to seven years, might mix bonds and lower volatility stock funds.
Josh:Long term goals, like retirement, can take on higher stock allocations. You want to diversify across more asset classes the farther out your goal. And remember, consistency beats timing. Trying to jump in and out of the market doesn't work. A disciplined approach wins over time.
Josh:If you have a four zero one ks or other employer plan, take full advantage of any employer match and use cost efficient funds. Keeping costs low, and automating your contributions, will help you stay on course. Fourth is tax planning. Taxes might not be exciting, but they're one of the most powerful levers in your financial plan. Good tax planning isn't about avoiding taxes, it's about paying no more than necessary.
Josh:Consider strategies like contributing to tax advantage accounts, such as 401ks, IRAs, and HSAs. Doing Roth conversions when your income and tax rate are temporarily lower. Harvest investment losses to offset gains in taxable accounts. And using charitable giving strategies like donor advised funds, if generosity is part of your plan. Tax laws change often, so coordinate with your CPA or planner to stay efficient.
Josh:Fifth, estate planning and legacy. Finally, think about your legacy, how you want your wealth to impact others. Estate planning isn't just about transferring money. It's about communicating your values and intentions. That might include writing or updating your will, creating a trust if appropriate, and naming beneficiaries on all accounts.
Josh:A good roadmap doesn't end with your lifetime. It reflects why and how you want your resources to make a difference. When you integrate all five elements, cash flow, risk, investing, taxes, and estate planning, you've got a comprehensive plan that supports your values and goals. That's step four, build a plan that connects today's actions with tomorrow's freedom. Here's the final step, and one of the most important, keep your roadmap up to date.
Josh:A financial roadmap isn't a one time project. It's a living document. Life changes, jobs, families, markets, priorities, so your plan must evolve too. Review your roadmap at least once a year or whenever a major life event happens. Ask yourself, are my goals still aligned with my values?
Josh:Has my financial situation changed? Are my investments still appropriate for my goals? Do I need to adjust savings, insurance, or state plans? Think of it like updating your GPS. The destination might stay the same, but the route may need to change.
Josh:Working with a fee only certified financial planner can make this process easier. A good planner keeps you accountable, helps you adapt to changes, and protects you from emotional decisions that can derail progress. A well built and maintained roadmap delivers peace of mind that you're heading in the right direction even when life throws detours your way. So step five, review and adjust regularly. Let's recap what we covered today.
Josh:To build your personal financial road map, first, start with your values. Define what truly matters to you. Two, take an honest snapshot of your current financial situation. Three, set clear prioritized goals that align with your values and time frames. Four, build a comprehensive plan that integrates cash flow, risk, investing, taxes, and estate planning.
Josh:Five, keep your road map relevant by reviewing and adjusting as life changes. When you follow these steps, your money starts working for you, not the other way around. You gain clarity, confidence, and direction. And that's what true financial freedom looks like. I'm Josh Duncan, partner at F5 Financial Planning.
Josh:If you'd like to learn more about how we help clients achieve financial freedom for personal significance, please visit our website at www.f5fp.com. Thanks for watching, and I'll see you in the next video.