The Certified Financial Planner Board of Standards, Inc. defines Financial Planning as:

Financial planning is the process of meeting your life goals through the proper management of your finances. Life goals can include buying a home, saving for your child’s education or planning for retirement.

The financial planning process consists of six steps that help you take a "big picture" look at where you are financially. Using these six steps, you can work out where you are now, what you may need in the future and what you must do to reach your goals.

The process involves gathering relevant financial information, setting life goals, examining your current financial status and coming up with a strategy or plan for how you can meet your goals given your current situation and future plans.

Is there a difference if you are Catholic?   You still have life goals.  Your faith comes into the process and the way you think about your goals.  In a short article, we have to focus on two critical points.

• Education planning:  Most Americans have less than 2 children and send them to public primary and secondary schools.  If you add more children and education that includes private or home school education, you have entered a different dimension.  For most planners, education planning an easy topic, for you it may not be. 
• Cash flow and insurance planning: You may have one spouse working outside the home.  This may mean that you will have to sacrifice and work longer.  What it does mean is that you need to plan more carefully.  There just is not as much room for mistakes.  You probably have a greater need for insurance and this should be reviewed.

Both of these points can derail your retirement goals.  In today’s world, there is more affordable access to financial planners.  Getting some help can be a great first step.

When it comes to planning for the education needs of your family, in addition to traditional savings programs, there are two investment vehicles targeted to education expenses. The first is the Coverdell ESA and the second is the 529 plan. 

The rules and advantages of each are different, so the key is to assess the goals for your family and determine which plan or combination of plans is right for you. 

A Coverdell ESA can be used for elementary and high school education as well as college and can be established through any financial institution that serves as a custodian for IRA plans. That means you can choose where to invest your money, including in a mutual fund if you want.  However, there are income limits that affect contributions and the maximum contribution in a tax year is only $2,000. 

A 529 plan, on the other hand, is a savings plan operated by a state or educational institution that is not subject to income or contribution limits.  One of the biggest benefits of a 529 plan is that you, the donor, can reclaim the funds for yourself at any time for any purpose.  However, you will have to pay income tax and a 10% penalty on the earnings portion of the “non-qualified” withdrawal.   

Remember that a financial planner can help you put together a plan for your family.  In addition, the information available at www.savingforcollege.com can help you start the planning process.