Financial planning is a comprehensive analysis and evaluation of an individual’s current and future financial affairs. This analysis starts by understanding “What’s Important to You” before using current data to predict future cash flows, asset values, and spending plans.
In short, financial planning is the coordination of your values, goals and objectives with your financial affairs to accomplish “What’s Important to You”.
It is important for farmers to be proactive with their financial planning. Just like harvest, farmers cannot rush their financial planning. Planning harvest starts immediately after the current year harvest is in the bin, although at a relaxed pace. As spring seeding approaches, the pace picks up accelerating toward the new harvest when the race against the weather is on.
Financial planning is no different. Because the future seems so far away, we start out slowly working through the planning cycle:
- Why Are You Developing a Farm Financial Plan?
- What’s Important to You?
- What’s Important to Other Stakeholders?
- Farm Management Option Analysis
- Framework to Address Symptoms, Causes and Alternative Solutions
- Option Analysis Budgeting
- Option Analysis Risk
- Option Best Fit Testing
- Contingency Planning
- Exit Planning
- Implementation Action Plan
Knowing the current financial state of your farm business is of vital importance to understanding your next move; whether to expand current operations, sell off your farmland, or pass the farm down to the next generation. Without a solid understanding of the current financial outlook, you will be stuck at a fork in the road and not know which road to take.
Through education and working alongside a knowledgeable professional advisory team, the farm business manager can ensure their business is financially viable and set up for success; regardless of which path they choose to go down.
The Financial Planning Module provides participants with a financial understanding of the farm and non-farming property they own or control. Once this understanding is achieved, participants will address financial options available to them through identifying “Who, What, When, Where, and Why” as related to their financial resources considering the “What is Important to You” strategy.
With this understanding, participants are able to choose their preferred option and then create an Action Plan (that may include choosing a professional advisory team to assist with creating a comprehensive financial planning report).
Why are you Developing a Farm Financial Plan?
What is Important to You?
What’s Important to Other Stakeholders
Farm Management Option Analysis
Framework to Address Symptoms, Causes, and Alternative Solutions
Option Analysis Budget
Option Analysis Risk Worksheet
Option Best Fit Test
Exit Planning Strategy
Implementation Action Plan
In order to successfully pass each module, the participant must:
- Receive a passing grade of >60% on the module quiz
- Spend adequate time reviewing all online content (approx. 5-15 hours)
- Fill out all worksheets (approx. 12 worksheets per module)