Chartered Financial Consultant® (ChFC®)

Since 1982, the Chartered Financial Consultant has remained the most extensive education available for professionals seeking a designation in financial planning. More than 41,000 individuals have attained this distinction, enabling them to effectively apply a comprehensive financial planning process to their clients’ needs.

Individuals with the ChFC designation have demonstrated their vast and thorough knowledge of financial planning. The ChFC program is administered by the American College. In addition to successful completion of an exam on areas of financial planning, including income tax, insurance, investment and estate planning, candidates are required to have a minimum of three years experience in a financial industry position.

Like those with the CFP designation, professionals who hold the ChFC charter help individuals analyze their financial situations and goals.

The first step in personal financial planning is controlling your day-to-day financial affairs to enable you to do the things that bring you satisfaction and enjoyment. This is achieved by planning and following a budget, as discussed in the first article in this series.

The second step in personal financial planning, and the topic of this article, is choosing and following a course toward long-term financial goals. As with anything else in life, without financial goals and specific plans for meeting them, we drift along and leave our future to chance. A wise man once said: "most people don't plan to fail; they just fail to plan." The end result is the same: failure to reach financial independence.

The third step in personal financial planning, "Building a Financial Safety Net," is discussed in the third article in this series.


Step 1: Identify and write down your financial goals, whether they are saving to send your kids to college, buying a new car, saving for a down payment on a house, going on vacation, paying off credit card debt, or planning for retirement.

Step 2: Break each financial goal down into several short-term (less than 1 year), medium-term (1 to 3 years) and long-term (5 years or more) goals.

Step 3: Educate yourself! Read Money magazine, or a book about investing, or surf the Internet's investing web sites. The stock market is not voodoo. With a little effort you can learn enough to make educated decisions that will increase your net worth many times over. Then identify small, measurable steps you can take to achieve these goals, and put this action plan to work.

Step 4: Evaluate your progress. Review your progress monthly, quarterly, or at any other interval you feel comfortable with, but at least semi-annually, to determine if your program is working. If you're not making satisfactory progress on a particular goal, re-evaluate your approach and make changes as necessary.


There are no hard and fast rules for implementing a financial plan. The important thing is to do SOMETHING, and to start NOW.


First Step to Financial Success

Personal financial planning consists of three general activities:

  • Controlling your day-to-day finances to enable you to do the things that bring you satisfaction and enjoyment.
  • Choosing and following a course toward long-term financial goals such as buying a house, sending your kids to college, or retiring comfortably.
  • Building a financial safety net to prevent financial disasters caused by catastrophic illnesses or other personal tragedies.

This article addresses how to achieve the first of these goals: controlling your day-to-day financial affairs. See "More of This Article Series" in the box to the top right for Step Two: "Setting Financial Goals," and Step Three: "Building a Financial Safety Net."

Why Should I Budget?

Controlling your financial affairs requires a budget. For many people, the word "budget" has a negative connotation. Instead of thinking of a budget as financial handcuffs, think of it as a means to achieve financial success.

Whether you make thousands of dollars a year or hundreds of thousands of dollars a year, a budget is the first and most important step you can take towards putting your money to work for you instead of being controlled by it and forever falling short of your financial goals.

To those of you who think you know where your money goes without keeping detailed records, I issue this challenge: keep track of every cent you spend for one month. I promise you'll be surprised and perhaps shocked by how much some of your "small" expenditures add up to.

For an eye-opening illustration, try the American Express Saving or Spending Big Calculator. Enter the cost and frequency of a habit or indulgence and how many years you expect it to continue. Click a button and see not only how much you'll spend over the specified time period, but how much that same amount would grow to if you invested it at various rates of return. Mind-boggling!

Budgeting and tracking your expenses gives you a strong sense of where your money goes and can help you reach your financial goals, whether they are saving for a down payment on a house, starting a college fund for your kids, buying a new car, planning for retirement, paying off the credit cards, or saving for that trip to Aruba.

Since financial matters are one of the leading causes of marital discord and divorce, getting a handle on your spending, implementing a budget, and saving for the future can also have positive effects on your relationship with your spouse or partner.

Should I Use a Software Program?

You don't need to invest in fancy software in order to do a budget, but a good software program WILL make the job easier, and being able to print out graphs and reports from your PC can serve as a motivation for entering all that data.

Many banks are now offering free PC banking and free personal finance software. You simply dial into the bank's computer (or your bank may use web-based banking), and download the checks that have cleared your account, directly into your personal finance software. Then you indicate an expense category for each check.

You can do a basic comparison of budget versus actual expenses by category, or you can enter more detailed information such as investments, assets, liabilities, etc., and print personal financial statements showing your net income and net worth.

Some of the most popular personal finance software programs for checkbook and expense tracking are: Quicken, MS Money, and MoneyDance.

Whether you use sophisticated personal finance software or a couple of pieces of paper and a pencil, the important thing is that you get on the road to financial freedom by starting a budget today.

The $ Adds Up...

Habit Yearly Cost
Daily Cup of Coffee $547/yr
2 Packs of Cigarettes/Day $2555 - $3285/yr
1 Hardback & 3 Paperback Books/Mo. $690/yr
Lunch Take-out 5 days/wk @ $5-$10/day $1300 - $2600/yr
3 Drinks at a Bar/Wk. $936 - $1092/yr
3 Six-packs of Coke/Wk. $624 - $936/yr

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