Whether it's

a new home, a child's education or a secure retirement, most people know

what they want out of life.

But the individuals

who are most likely to achieve their goals, the Georgia Society of CPAs

reports, are those who have developed and implemented financial plans.

A financial

plan typically evaluates your current monetary situation, as well as identifies,

estimates and develops strategies for meeting the cost of your long-term

goals. A well-constructed plan covers all aspects of your economic life

including investments, insurance, tax, retirement, estate planning and

cash management.

A central component

of any financial plan includes a long-term investment strategy that will

help you accumulate the capital for meeting your goals. A good plan nvolves

more than just picking the right investments.

In fact, CPAs

say that your allocation of investments among different classes equities,

fixed income and cash and cash equivalents can have a greater impact on

your success than the actual investments you choose.

Once you've

established an allocation that considers your tolerance for risk and your

financial goals, the plan should focus on achieving diversification within

each investment class.

Any review

of your financial situation must consider your family's ability to maintain

its present standard of living in the event of untimely death or disability.

With adequate

coverage, loss of income due to death or disability should not necessitate

major life-style changes. It is also important that your financial plan

reflects adequate protection against losses resulting from damage to or

loss of your home and personal property, including your cars.

While taxes

should not drive your financial decisions, tax planning is important.

To be most effective, a comprehensive financial strategy should include

a year-round approach to making the most of various tax-savings opportunities,

including tax-deferred and -favored investments, income shifting, effective

use of deductions and credits, and managing debt.

For many people,

planning for a financially secure retirement is a top priority. In developing

your financial plan, it's important to estimate how much money you will

need to support the life-style you envision.

Although Social

Security and company-sponsored pensions may provide some income during

retirement, it is unlikely that these resources will sufficiently cover

your expenses. Therefore, it is important that your financial plan includes

how you will accumulate the funds you need for a comfortable retirement.

Death is an

eventuality that every financial plan must address. Estate planning assures

the appropriate transfer at death of all assets you own. It also makes

certain that you are utilizing the appropriate techniques for minimizing

your potential liabilities and expenses and preserving your wealth for

future generations.

Another important

part of a good estate plan is choosing someone to hold a durable power

of attorney for you, someone who can handle your assets in the event you

are unable to do so.

Additionally,

you will want to consider signing an advance directive that discloses

the extent of medical treatment you want to receive in the event you become

physically or mentally unable to communicate your wishes. Cash flow management

encompasses everyday strategies for budgeting, managing debt and building

an emergency cash reserve.

An analysis

of your cash flow shows, for better or worse, how you earn and spend your

money. You can use this information to adjust your expenses to cover immediate

needs, while investing for long-term goals.

Developing

a financial plan is an ongoing process. CPAs say that it's important that

you review your plan at least annually and more often if there are major

changes in your life, the economy or tax law.

The GSCPA is

the premier professional organization for CPAs in the state of Georgia.

With more than

10,000 members throughout the state, the purpose of the GSCPA is to promote

the study of accountancy and applicable laws, provide continuing professional

education, maintain ethical and work standards, and provide information

about accounting issues to the membership and the public. For information,

visit www.gscpa.org .

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