CuVantis Education Series

Where Do I Start?   The Financial Planning Pyramid

Just as the ancient pyramids of Egypt have stood the test of time, the financial planning industry has long used the pyramid to illustrate how to build lasting financial security.  The Financial Planning Pyramid is a simple navigational tool that illustrates each of the key areas of personal finance and helps you prioritize where you should focus. While the foundational elements aren’t necessarily exciting, establishing a strong foundation can help prevent unexpected life events from derailing your long-term goals.   Here’s a quick look:

Financial Planning Pyramid

Personal Balance Sheet – A simple listing of all your assets versus all your debts. Your Net Worth can be found by subtracting your total debts from your total assets. Put another way, it is what you own minus what you owe.

Personal Cash Flow Statement – Similar to the balance sheet, but the cash flow lists all your income versus all your expenses over a given period of time.  This will tell you if you’re living within your means.

Emergency Fund – Typically a basic savings or similar type of account with 3-6 months’ worth of living expenses that can be used to handle unexpected expenses or short-term interruptions to income.

Insurance Protection – Life, health, disability, property and other types of insurance to protect your finances from the strains of medical bills, accidents and other unexpected events.

Investment Planning – Understanding the different characteristics of various investment vehicles and determining when each may be appropriate for a given goal.

Tax-Planning – Analyzing a financial situation to implement strategies that minimize taxes.

Retirement Planning – The process of determining retirement income goals and the actions and decisions necessary to achieve those goals.

Estate Planning – The preparation of tasks that serve to manage an individual’s asset base in the event of their incapacitation or death.

Life Planning – The process of creating a plan to use your financial and personal resources to create the life you want.

More information and calculators on each of these topics can be found in the Learn or Plan sections of our website.  For further assistance or to request an appointment with one of our advisors please complete the form below.

The information presented here is for educational purposes only and should not be considered financial, tax or investment advice.  Please consult a qualified professional.

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