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The Financial Planning Toolbox

Every profession has its toolbox. The dentist has drills, files, fillings, and crowns. Doctors have everything from stethoscopes to medications to surgical instruments. Attorneys have their trusts, contracts, escrow accounts, and other legal documents. As a financial planner, I also have an extensive toolbox and I use those tools to help clients improve their lives and solve particular problems and issues. I thought it would be fun to identify some of these tools and explain why they get used…

Emergency Fund

This is one of the most important tools in my toolbox and it’s such a simple one. I want clients to keep some cash in case of emergencies. Possible emergencies include job loss, medical crisis, an appliance breaking, a flood in your home, or a car that needs repair. It could happen to you, or it could happen to a loved one. Having an emergency fund means you don’t have to go into debt or rely on a GoFundMe drive to recover from a crisis. It keeps an emergency from becoming a disaster.


Even though I try not to tell clients what to spend, cash flow analysis plays a vital role in my clients’ financial health. Over the long run, your income must exceed your expenses, or you run out of money. It’s simple math and while I may not tell you what you can spend, I will tell you if your budget does not balance.


Savings are simply the excess of income over expenses. While I am making it sound like a side-effect of good budgeting, in reality savings should be deliberate. You need to save 10% of your income each year for retirement if you start early. If you start late, you may need to save much more or work much longer.

Tax Management

If you make money, you pay taxes. This is simple and to be expected. But tax rules are complicated and it’s my job to help you legally minimize the amount of taxes you pay. That might mean I recommend tax-advantaged accounts such as 401(k) plans, IRAs, or 529 plans. It also might mean that I look at your income to make sure you qualify for certain tax credits. Although I don’t handle the preparation of your tax returns, I do review your tax situation to ensure that you’re benefiting from all the tax advantages available to you. If you are a business owner there may be even more options to save on taxes, particularly when you sell your business. Investors can also benefit from proper tax management with their investment accounts. Tax management is my adjustable wrench. I use it for almost all projects.

Education Planning

To assist clients with education planning, I utilize a comprehensive set of tools. These include utilizing 529 plans to save for college, leveraging tax benefits, understanding financial aid, applying for scholarships, and navigating student loans. Ultimately the choice of college plays a crucial role in the cost of higher education. Recognizing the significance of diligent education planning, I offer a program called College Money Match, which includes all of these tools to help clients make informed decisions.


Things don’t always go according to plan and that’s where insurance comes in. It’s an important tool to mitigate certain risks. Life insurance will protect your loved ones against the risk of your premature death. Long-term disability insurance protects you and your family against permanent disability that interferes with your ability to earn a living. Liability insurance protects you against accidents or actions which cause others harm or damage to or theft of your own property. Often insurance is sold incorrectly, and coverage is not right for your risks. Insurance agents often see insurance as the answer to every financial issue which can result in clients getting expensive policies that don’t meet their real needs. As a financial planner, who is also licensed to provide life and health insurance in multiple states, I see insurance as just one of the tools available to me. Everyone needs insurance, but they need the right amount for the right price.


Annuities do not have a great reputation, even though they are often sold to clients by financial advisors and insurance agents. I see the right kind of annuity as a tool to solve certain problems, but it must be the right fit. The only reason to buy an annuity is to provide guaranteed income now or at a future date. Annuities are too expensive to be good tools for wealth accumulation. They are often sold for tax management, and while gains can be sheltered from taxes with annuities, once you start taking income, it is often at a higher tax rate than you could have achieved without it. And yet, the right kind of annuity is a fantastic tool to provide low-cost income guaranteed for one or two lives. It is an important tool on my toolbelt to be used at the correct time and for the right reason.


Investments are a central tool in my toolbox. If you are saving for a goal such as retirement or college, you need to invest properly. You also need to invest with your risk tolerance in mind, so you can stay on course and keep invested during the downturns which are always a part of investing. You need to be properly diversified and keep your costs low. With investing, you can get rich slowly, but surely. Hitting it big by buying the next hot stock is not investing, its speculation. The objective is to have a portfolio that allows you to meet your goals while minimizing risks. Portfolio construction is a tool which is front and center in my toolbox.

More Tools

There are many more tools that I have not mentioned. Some are ways of borrowing money including mortgages and car loans. Others help you pass on your wealth to heirs. There are many cases, where I need to bring in a specialist who can wield the tools better than I can (attorneys, CPAs, mortgage specialists, geriatric care managers, daily money managers). But in all cases, I am looking to use the tools in my financial planner’s toolbox to help clients reach their goals and take the burden of worrying off their shoulders. That’s what CFP®s do, or at least that’s what I do. I would be happy to discuss your financial planning needs and explore the various tools I’ve mentioned, as well as recommend others that may be beneficial to you, even if they’re not part of my current offerings. You can learn more and schedule a complimentary consultation by clicking here.

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