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A Guide to Personal Financial Planning

To optimize your finances in the long run, it’s crucial to have a personalized financial strategy. By creating objectives compatible with your present financial situation, budget, and timeframe, you can take significant strides toward realizing your envisioned future. Whether your aspirations involve homeownership, clearing student loans, or securing a comfortable retirement, you may be asking yourself, “How do I get started today?”

What is a financial plan?

Financial Planning is a process that helps to put your present and future financial situation into perspective. Your personal financial plan includes specific steps that help you reach your long-term financial objectives. An important part of the process is regularly reviewing your plan to make sure you’re on track, and adjusting if your situation or goals change.

Making a plan provides many important benefits. It can reduce financial stress, give you a better idea of what your financial future will be like, and help you understand what specific actions can help you achieve your goals. It also helps you optimize your current resources and addresses a variety of potential risks. Santander Investment Services Financial Advisors are available to create and help you implement your own financial plan.

What are the steps of the financial planning process?

Step 1: Understand your financial circumstances and identify goals

The first step in any financial plan is to assess your current situation. What assets do you own? How much cash do you have? Have you put money into investments, bought stocks, or started saving for retirement? Think about money you owe, for example: credit card debt, student loans, mortgages, car payments, or any other money that you borrowed. Once you have a clear sense of your current financial picture, you can set your goals.

Thinking about the big questions that affect your financial future is sometimes difficult. Where do you want to be in five, ten, or thirty years? What kind of home do you want to own? Will you have children? What do you see yourself doing in retirement? How do you plan for long-term care? If these questions are overwhelming, try to imagine the kind of life you want, without worrying too much about the particular details.

Whether you want to be a homeowner who supports your kids through college, or a person with no debt who retires early, making a financial plan is an important step toward creating your ideal future.

Step 2: Develop and implement your personal financial plan

A financial advisor can develop an actionable plan to help you achieve your goals. Your financial plan may include following a budget, building an emergency fund, executing an investment plan, and implementing strategies to address debt, taxes, and managing risks. 

Make a budget

After establishing your goals and reviewing your current finances, you may need to adjust your budget. This means evaluating your income and expenses. Some spending is committed, like car insurance, groceries, and rent. Discretionary expenses are flexible and include entertainment, dining out, and travel. Reviewing the details of your budget can help prioritize your spending habits to allocate the right amount of savings to achieve and protect your financial goals. 

Plan for emergencies

An emergency fund is important to be prepared for unexpected situations, such as home and auto repairs, or a short-term loss of income. If you don’t already have enough set aside to cover three to six months of committed expenses, start small, create a regular savings habit, and build up your emergency fund slowly. 

Building strong credit is another good idea to help support your budget and long-term financial health. Good credit will give you better options if you need to take out a loan, whether it’s an auto loan, a mortgage, or a personal loan.


Minimizing the amount of tax you pay allows you to keep more of your hard-earned and accumulated money. Effective tax planning is key to reaching your goals. Working with a qualified tax professional can help you stay informed about tax laws and opportunities for deductions or credits. 

You can also contribute to tax-advantaged accounts, like retirement plans through your employer, individual retirement accounts (IRA), health savings, or college savings accounts.  


Debt plays a significant role in your financial well-being. The most important factors to consider are the timing and the cost of debt to your overall financial plan. Using debt poorly can harm your credit score and result in higher interest costs. As part of financial planning, it's important to grasp the distinction between good debt and bad debt, and how using debt wisely can assist you in achieving your objectives.


Investing may sound like something only rich people can afford, but that’s not the case. Investing can be easy and inexpensive with tools like 401(k) plans, robo-advisors, and IRA accounts

Your financial plan can help you determine the best way for you to invest, whether for retirement, homeownership, or college:

  • Employer-sponsored retirement plans. If you have a 401(k), 403(b), or similar plan you can get started small and gradually increase your contributions toward the IRS annual limit. In 2023, that limit is $22,500 if you’re under age 50. If you’re 50 or older, the contribution limit is $30,000.
  • Traditional or Roth IRA. Tax-advantaged individual retirement accounts can be used to invest and grow your retirement savings with an annual contribution limit of $6,500 (in 2023), or $7,500 if you’re over 50.
  • 529 education savings plans. State-sponsored plans provide tax-free investment growth and withdrawals for certain education expenses.

Step 3: Monitor your plan

Financial planning is a process, not an event. You should review your plan at least annually to measure your progress and address any changes in your financial situation. As your life changes, your plan should change with it. It’s important to periodically re-evaluate your goals; have they shifted? Do you need to make new goals? Have you accomplished some of your goals? Answering these questions will help you make the necessary adjustments to stay on track to reaching your financial objectives.

Saving for emergencies, planning for retirement, buying insurance, and updating your personal financial plan throughout life can help keep your finances secure, and help reduce financial stress. As you get older, you can take steps to improve your financial situation, including:

  • Add to your retirement investments.
  • Have a sufficient emergency fund to protect against unexpected expenses and periods of income instability.
  • Buy insurance to protect your family from the things you can’t afford to lose, like your livelihood, health, and ability to earn income.
  • Regardless of your age or financial situation, a basic estate plan consisting of a will, durable power of attorney and health directive, as well as proper titling of assets and accurate beneficiary designations on your financial accounts, can provide for your money and other assets to be distributed and settled according to your wishes after you’re gone. If your situation becomes more complex, a qualified attorney can help determine if trusts or other strategies can be helpful to protect and preserve your wealth.

We are here to support you along your journey

We know it might be overwhelming to think about, and manage, such a wide range of factors that impact such an important part of your life. Santander Investment Services Financial Advisors will not only help create a personal financial plan that’s tailored to your goals and needs, but also provide financial guidance and investment advice as those goals evolve. 

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