What Is Comprehensive Financial Planning?

Comprehensive financial planning means creating a spending and savings path for meeting your current money needs while saving for your future. This entails using a variety of financial strategies and instruments to help pay your bills and save for a college fund, home purchase and retirement. With or without a financial planner, it’s never too early to start laying out your monetary priorities and setting goals to meet them.

Household Budget

A comprehensive financial plan starts with creating an annual budget that tells you how much you’re spending and saving each year. Those quick lunches, extra DVDs, romantic dinners, golf rounds and cute skirts can add up to some serious bucks without your realizing it. Create a budget that tracks your spending each month and includes savings categories for goals such as a house down payment or vacation fund. Make credit card debt reduction a part of any budget.

Savings Plans

Once you’ve created a budget that controls your spending, it’s time to decide what to do with your savings, which might go to a college fund, home purchase, retirement account, emergency fund or vacation. A health savings account or flexible spending account that sets aside cash for annual health care expenses eliminates payroll taxes on that money. Saving for specific discretionary items, such as a flat-screen TV or new furniture, helps prevent blowing your budget, which can occur when you make unplanned purchases as you see cash piling up in your bank account.

Retirement Planning

The best way to save for retirement is to shock yourself by using a retirement calculator. These online tools let you set a goal for how much you want to live on after you retire using cost-of-living calculations to let you know how to proceed. Once you set your retirement goal and add in what you have saved so far, the calculator will tell you the (often surprising) amount you need to start saving now. Participating in a 401(k) match at work take advantages of the “free money” an employer offers that, with interest, can provide an extra six figures of retirement income. A comprehensive financial plan often includes mutual funds, a life insurance policy or an Individual Retirement Account. Different life insurance policies protect a family in the event of an an earner’s untimely death or provide a cash retirement benefit later. In addition to life insurance, long-term financial plans often include estate planning, which transfers assets during your later years or upon your passing.


A comprehensive financial plan includes investing excess cash, often with the guidance of a financial adviser, to develop a portfolio that includes the right mix of conservative and aggressive investments. This type of planning includes strategies for reinvesting capital gains to minimize tax payments. Investments can include real estate such as a rental home that creates annual positive cash flow and a long-term asset.

College Fund

Setting aside money for a college education is less burdensome if you start early, letting that money earn interest for many years. Even setting aside a small amount each month will get you in the habit of contributing and remind you to increase your savings as you start earning more money.

Home Purchase

Comprehensive financial planning includes saving for a home. Even if you’re years away from buying one, calculate what your down payment costs might be, what kind of credit score range you’ll need and how much you’ll need to set aside per month to have enough cash saved when you’re ready to buy. Waiting until shortly before you’re ready to buy might result in your putting money you could have used for your down payment into instruments you can’t touch without paying a penalty.