Financial Planner Skills
The Skillset
This skillset will give you an on-ramp to understanding and improving your financial situation. Though you will begin with an inventory of your current financial reality, you will develop your financial literacy by studying the terms and practices of personal finance, becoming familiar with your own habits, and setting achievable, specific financial goals. While financial planning can't fix a broken system, it can give you more agency and skills for living within that system.
Financial Planner Skills Tracker
(1) Assess your income, expenses, savings, and debts.- Calculate your monthly take-home pay, fixed and variable expenses, and contributions to retirement/HSAs/investment accounts, etc.
- Determine the typical monthly cost of your necessities
- Inventory your outstanding debts, the balance savings, checking, investment, and retirement accounts, and the interest rate on each account
Financial planning starts from knowing exactly what you have, what you earn, and what you spend your money on. You may not have all the accounts mentioned in this step; don’t worry! This inventory helps paint a picture of your current financial situation.
(2) Learn about the key principles of personal finance:- Credit scores and credit reports
- Types of checking, savings, investment, and retirement accounts
- How lines of credit work (loans, credit cards, etc.)
- How simple and compound interest work.
Personal finance is a complicated beast, especially if calculating interest rates and returns on investment feels like sauteing your brain on a high heat. Take it slow, and when in doubt, there are hundreds of free interest rate calculators online you can use to skip the math.
(3) Learn about a few different methods of budgeting, including line-item budgets, zero-sum budgeting, and spending trackers. Assess which ones may work for you, and try them out.Different budget systems meet different budgeting needs; someone trying to get out of debt may benefit from a line-item system while someone working on building their retirement account may work better with a “pay-yourself-first” budget.
(4) Learn about three personal finance topics that are of interest or importance to you, such as:- Strategies for paying down debt
- How to ask for a pay raise
- How to improve your credit score
Independent research can be overwhelming. Start with some of our recommended resources or ask someone you know with good financial health to discuss these topics with you.
(5) Identify your financial priorities and rank them in order of their importance to you. Some examples may be:- Pay less for car insurance each month
- Build a 3-month emergency fund
- Pay off a high-interest loan
- Save up for a down payment on a car or housing
Your financial priorities can also be ranked by urgency. If a bill is about to go to collections and impact your credit score, you should make it a priority because it may get in the way of your other goals.
You can also download the skills tracker as a printable .PDF here.
Getting Your Badge
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