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7 Steps of Financial Planning


It’s time to focus on financial fitness. By developing a financial plan or evaluating your current strategy with the support of AAFMAA Wealth Management & Trust LLC (AWM&T), you’re one step closer to ensuring that your finances align with your desired future.

Start Your Year Off Strong with These 7 Steps:

1. Establish Goals

To begin, ask some questions about your future. Where do you see your family in 10 years? What does retirement look like? Will you travel, own multiple homes, buy a boat, help grandkids with college, or invest in a classic car? Write down your goals and structure them through the S.M.A.R.T. method, which means your goals are Specific, Measurable, Attainable, Relevant, and Time-based.

2. Assess Risk

Risk tolerance is the degree of variability in investment returns that you are willing to withstand in your financial plan. Risk tolerance is unique to you and considers financial goals, time horizon, age, life cycle phase, and current economic and political conditions. Although you may identify as fiscally conservative, risk-averse, neutral, aggressive, or risky, it is important to match those terms with numbers. Our free risk assessment tool quantifies your acceptable levels of risk and reward.

3. Analyze Cash Flow

It’s crucial to understand your cash flow — the movement of money in and out of your accounts. Determine where the money is going and how much you spend on a monthly and annual basis, then conduct an analysis. Determine which costs are essential and which are discretionary. Often, you’ll find room for improvement.

4. Protect Your Assets

It’s important to have the appropriate insurance tools to protect your assets. Conducting a simple net worth exercise helps identify what to insure and how much insurance is needed. This figure is a starting point for determining the appropriate amount of coverage to hold in a Personal Liability Umbrella Policy. You’ll also want to consider term or permanent life insurance (whole life, universal life, and variable universal life) and long-term care coverage.

5. Evaluate Your Investment Strategy

When it comes to investment strategy, consider whether you are active or passive. An active investor believes the markets are inefficient and needs to actively trade to achieve above-average market returns. A passive investor believes the markets are efficient, and therefore, is comfortable buying and holding.

6.  Consider Estate Planning

Estate Planning will be unique to each family’s situation, and the conversation is essential. Some key items include:

  • A Letter of Instruction or Testamentary Letter
  • Will 
  • Trust 
  • Durable General Power of Attorney 
  • Durable Power of Attorney for Healthcare
  • Advanced Medical Directive

7.  Implement and Monitor Your Decisions

The final step to financial fitness is implementing and monitoring your decisions. AWM&T Relationship Managers can assist you in evaluating your goals, assessing your risk tolerance, and refining your savings and investment strategy. Additionally, we provide a complimentary portfolio review to determine your strongest investment plan and vehicle, personalized to your family’s needs.

AWM&T: Your Choice for Financial Fitness

Financial preparedness is the key to long-term success, and the AWM&T team is here for you. Make sure your finances are fit and ready to serve you well by connecting with an AAFMAA Wealth Management & Trust Relationship Manager at 1-910-307-3500 or emailing


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