The goal of this module is to introduce the personal financial statements that are foundational to the planning process. The Statement of Financial Position along with the Cash Flow Statement provide a clear picture of clients’ financial situation by detailing the assets, liabilities, income, expenses, and special circumstances clients have. Gathering this information allows for a thorough analysis that can lead to appropriate recommendations.

Cash flow management is another important component of financial planning, so we will cover budgeting because as recommendations are made, cash flow may either be increased or decreased and these effects need to be considered. This module will also address how to calculate the appropriate amount needed for the emergency fund-another foundational planning component-and what are appropriate investments for this fund. From there, we conclude with a discussion of consumer protection laws and bankruptcy.

Author: David Mannaioni, CFP®, CLU, ChFC, CPCU

David Mannaioni, CFP®, CLU, ChFC, CPCU is an associate professor at the College for Financial Planning. Utilizing his 30+ years of experience in the financial services industry, David also maintains a financial planning practice where he works with his clients in all areas of financial planning. In addition to his certifications, David holds Life and Health insurance licenses in several states, as well as the Series 6, Series 7, Series 63, and Series 24 registrations with FINRA. You can contact David at david.mannaioni@cffp.edu

Complexity Level: Advanced