CREATING A PLAN: Building a Comprehensive Financial Plan Starts with Understanding your Current Financial Position


by Ramiro Marmolejo

Physical wellness and financial wellness often go hand in hand. When you feel that your financial life is out of balance, it’s hard to feel balanced physically or emotionally. That’s why having a well-rounded financial plan is so important. One of the most important foundational elements of a financial plan is your current financial position. You’ve got to realistic and honest about your current financial situation before you can make the right adjustments and move forward toward a more secure financial future.

Taking stock of your current financial position is essentially taking inventory. Think of how you would get ready for an anticipated vacation. After carefully planning the destination, you make a list of the things you will need for your trip, and you would take inventory of the things you already have—the clothes, equipment and supplies that you have, so you’ll know what you need to go out and get so that you’ll be certain that you have everything you need.

Your Current Financial Position is essentially an exercise in taking your financial inventory. The goal is to gain a complete awareness of all things relating to money in your life. First, you want to compare income to expenses. Look carefully at the money coming into your household, and the money going out—every last dime, if that’s possible to determine. Doing this will give you a better understanding of your cash flow. This is a great exercise for establishing or readjusting your budget.

Here are the things to gather and review: 

  • Paycheck stubs 
  • Company benefits statement or summary 
  • Company benefits booklet 
  • Statements on all investments and securities 
  • Bank statements 
  • Will / Trust documents 
  • Insurance policies: medical, auto, home, life, umbrella and disability insurance 
  • Retirement account statements (401k, 403b, IRA, pension plan, etc.) 
  • Debt statements (mortgage, auto, credit card).

After completing this task, here are the questions you need to consider:

  •  Does your income exceed your expenses?
  •  Do you have three-to-six months of living expenses in a savings account?
  •  Are the insurance coverage amounts for your home, auto, life, long-term care policies sufficient for your present situation?
  • Do you own disability insurance that covers at least 60 percent of your earnings before taxes?
  • Are you saving enough for retirement?
  •  Do you know how to assess your financial needs at retirement?
  •  Has your investment portfolio been reviewed within the last 12 months, and does your current plan still fit your financial and retirement goals and objectives?
  •  Do you have a will or trust? Was it executed in the same state where you presently reside? Has it been reviewed within the past five years?

These can be difficult questions, and it can take time to determine the answers. It takes effort, but the rewards are definitely work the effort.

When you can answer all of these questions, you will have a very strong understanding of your current financial position. If, however, you are unable to answer these questions with a high degree of certainly, do not feel bad—you are not alone. You are actually in the majority; most Americans can’t answer all of these questions.

As stated above, answering all of these questions takes effort, and often it takes assistance from a financial professional. It can be a big step, but it’s often a step that relieves a great deal of worry and anxiety. It’s the step that gets you moving in the direction of creating a comprehensive financial plan, which is what you need to get you to your desired destination.

Ramiro Marmolejo is a Certified Financial Planner (CFP) and Chartered Financial Consultant. He has been in the financial services industry for 20 years serving individuals and business owners. For more information about Marmolejo, visit or call 210-249-5360.

Posted in: Financial Wellness, Local
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