• Maybe you're saving to buy your first home
  
  
• Perhaps starting your own business is a dream
  
  
• The costs of a college education have spiraled and you may wonder how you will pay for your child's education
  
  
• You will probably live longer. Additional years after retirement can cost more than originally planned. Your company pension plan and Social Security may not be enough to maintain your standard of living after retirement.
  
  
• The answer can be Personal Financial Planning. But just what exactly is meant by "personal financial planning"?

Personal financial planning is a process, not a product. It is an organized, well-planned system of using money and financial resources to achieve both short- and long-term goals.

Do I need personal financial planning?

Yes. Everyone needs to plan for tomorrow. Today's complex financial marketplace and changing tax laws make it difficult for you to keep up with all the changes and to understand how these changes may affect you. At every income level, there are steps you can take to make more efficient use of your assets and to make sure that your financial future is secure.

What should it include?

A financial plan should include a review of your net worth, goals and objectives, property and other assets, liabilities, cash flow, investments, retirement planning, estate planning, tax planning and insurance needs, as well as a plan for implementing your goals.

Unfortunately, anyone can lay claim to the title of financial planner. Some so-called planners simply want to hawk their financial wares and reap commissions on insurance, annuities, or stocks and bonds. Even though many of these advisers have the necessary state or federal licenses to sell these investments, no government agency regulates them as financial planners. If you're not careful when you simply want advice about retirement planning, you could wind up being talked into some insurance policy or limited partnership you don't need.

Whom should I select to assist me?

What is a consumer to do? Hire a CFP, a CFA or a ChFC? Such impressive-looking designations, which come only after special tests or courses in financial planning, aren't always the best indicator of a financial planner's worth.

Before you plunk down your financial future and money with a stranger, you need to do a lot of homework. Many financial planners will list a number of designations after their names to show their areas of expertise. Below is a list of what some of these designations mean.

• Certified Financial Planner (CFP) - Must pass a two-day exam covering more than 100 financial planning topics. Three to five years of financial planning work experience also required. Awarded by the Certified Financial Planners Board of Standards.
  
  
• Certified Public Accountant (CPA) - CPAs must have a bachelor's degree, pass a national exam and continually keep up with changing tax laws. Should also be a member of the American Institute of Certified Public Accountants.
  
  
• Chartered Financial Analyst (CFA) - CFAs must pass three tests that require expertise in investing. Emphasis is on financial analysis and portfolio management. Must have a bachelor’s degree and three years of experience in financial sector. Awarded by the Association for Investment Management and Research.
  
  
• Chartered Financial Consultant (ChFC) - Must have three years of experience in financial services. Must complete a 10-course curriculum that focuses on comprehensive financial planning issues. Awarded by American College in Bryn Mawr, Pennsylvania. For information, call the Society of Financial Service Professionals.
  
  
• Chartered Life Underwriter (CLU) - Awarded to life insurance agents. Must complete 10 insurance-related courses. Awarded by American College in Bryn Mawr, Pennsylvania.
  
  
• Personal Financial Specialist (PFS) - Awarded to CPAs who have at least three years of financial planning experience, pass a six-hour financial planning exam and complete 72 hours of continuing education every three years. Must be a member of the American Institute of Certified Public Accountants.

If you are in need of assistance, the professionals at North Central Trust Company can help. We can help you build a team of experts that includes a financial planner with whom you are comfortable. For more information about selecting a financial planner, call or visit North Central Trust Company today.

The articles and opinions in this publication are for general information only and are not intended to provide specific advice or recommendations for any individual.

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