Financial Needs Analysis (FNA): Assess Your Finances & Plan for the Future

You want to feel secure about money — for yourself and your family. You also probably want the good stuff: a nicer place, better clothes and maybe that bucket-list trip to Thailand or Italy. 

You can work towards both with a healthy financial game plan. The key is knowing the differences between a financial need vs. a want. A financial needs analysis (FNA) can pave the way for this understanding, which is key to stronger financial health and a more secure future.

This guide explains what an FNA is, why it matters and a step-by-step process on how to do one, so you may understand how to spend and save to match your goals. 

What Is a Financial Needs Analysis?

Believe it or not, one of the biggest stumbling blocks to financial independence is understanding your current financial picture. In fact, a survey of over 2,000 U.S. adults conducted by Experian found that three in five adults believe their limited understanding of personal finances has led them to make a financial mistake.¹ 

Many people shy away from taking stock of their situation. It can feel overwhelming, and you may not know where to begin. However, an FNA provides ​​a detailed overview of your current situation. From there, you can see the path forward to create a personal strategy for your financial health.

You can begin this analysis on your own, but a financial professional may help provide deeper insights and guidance. Either way, you will review and consider:

• Income from all sources
• Monthly expenses and budgets, compared against income
• Assets such as real estate, savings and valuables, plus investments such as stocks and bonds 
• Liabilities and debt, including mortgages, loans and credit card balances
• Financial goals like buying or upgrading a home, or saving for college 
• Retirement goals
• Your personal risk tolerance

Why Is a Financial Needs Analysis Important?

A 2024 study revealed that greater financial literacy generally means greater financial well-being, while the opposite is also true.² Your knowledge and attitude towards money may directly affect your finances.

It is easy to spend money mindlessly, putting bills and subscriptions on auto-pay or shopping with the click of a button. But when you understand how much money you have coming in, where it goes and how it compares with your bills and debts, you take control. Then, you can structure your spending and saving based on your goals.

Even if you consider yourself well-versed in financial matters, you may be surprised when you complete a full analysis. A financial professional may ask questions you haven’t even thought about. This is why it’s important to dig deep with an FNA.

Debt Reduction

Reducing debt frees up more money for saving or spending. Debt costs money in the form of interest and fees, above and beyond the initial cost of the purchase. Over time, even a small treat can turn into a financial burden. Debt stacking and other debt management techniques can help you save in the long run. Your FNA will help you determine which technique may work best for you.

Saving for a Home

Buying a home is a major investment with long-term implications. It can represent a fruitful investment but also a financial commitment. You will need to save for a down payment, then ensure that your monthly cash flow allows for payments on the mortgage, insurance and property taxes. In addition, you will need to plan for upkeep and improvements like renovations or additions. Saving for a home might seem impossible, but an FNA can reveal a path to help make it a reality.

Education Saving

Whether you’re saving for your own education or that of a family member, you will need to plan carefully. You will need to understand what combination of saving, borrowing and/or applying for assistance (such as grants) makes the most sense for you. Saving takes a lot of effort, but borrowing also means planning for repayment. Either way, an FNA can make sense of the choices.

Retirement Planning

How you save for retirement depends a lot on how much time you have remaining until you retire — but it’s never too early. Consider possible expenses and where you plan to live. Then, figure out how much income you will need from retirement funds, social security in the United States, Canada Pension Plan (CPP) and Old Age Security (OAS) in Canada, investment returns and other sources.

Estate Preservation

When you work hard to earn and save, you also want to control where your money goes when you no longer need it. You want to make sure that your loved ones have what they need. It takes careful planning and understanding of taxation to maximize your assets. *

*Please note that WFGIA and its agents do not offer tax, estate planning or legal advice. These details are provided for informational purposes only and should not be construed as advice.

Key Components of a Financial Needs Analysis

Below are the key components of an FNA and the resources you will need to complete one. If you work with a professional, you will need to gather these items in advance so they have all the pertinent information.

• Income: Gather last year’s W-2s in the United States, T4 and T4A in Canada, or 1099s, as well as records of any other form of income, and perhaps a recent pay stub in case anything has changed.
• Expenses tracking: List all of your monthly expenses. You can devote a month (or more) to tracking as you go, so you have a real-time snapshot, or you can glean much of this information from past credit card and bank statements. 
• Debt and liabilities review: Grab recent statements from lenders, including your mortgage company. 
• Savings and investments analysis: Find or print out the latest statements from any savings accounts or other investments.
• Insurance coverage review: Get the latest statements from home, auto, umbrella and life insurance providers, plus any other form of insurance you carry.
• Retirement and education goals: Spend some time assessing how much you will need for education or retirement.
• Estate preservation needs: Ensure that any will or trusts are up to date, and put some thought into how much you are hoping to bequeath to friends or family, plus any funds that may be needed to continue running your business, if you own one.

How Do You Conduct a Financial Needs Analysis?

Once you gather all the information, you are ready to begin your financial needs analysis. Allow plenty of time, and understand that it may take more than one session, especially if you discover that you’re missing any information. 

1. Take Stock of All Assets

Looking at all of your information, focus first on assets. Include income, home equity, savings and any items of value.

Quick tip: Write your findings down in a way that works for you. You might prefer to map things out on a whiteboard, write by hand in a notebook or type into a spreadsheet. 

2. Accounting for All Expenses

Similarly to taking stock of assets, now you’ll review your expenses. Remember to account for monthly payments as well as irregular expenses like doctor visits or home repairs. It may help to add up the whole year’s expenses and then divide by 12.

Quick tip: Although most of this information is available digitally, printing it out can allow you to spread everything out and review it together at once, without having to jump from website to website.

3. Set Clear and Realistic Goals

Now return to your goals, such as saving for an education or retirement. Get more specific about the exact amounts you want to set aside and when. Along the way, you can also set short-term goals, like making an upgrade to your home or paying off a credit card.

Quick tip: If one of your goals is to pay down debt, consider the strategy known as debt stacking. 

4. Focus on Needs

Remember when we talked about the difference between needs and wants? Here is where to get real about what you and your family need. It’s okay to indulge occasionally — in fact, building some “fun” spending into your budget can make the whole process easier. However, this is called a financial needs assessment because it focuses on needs.

5. Customize Your Plan

When creating your plan, budget how much you will spend on each item. Set clear priorities and make sure you have good reasons for your choices. Communicate with your family or others who will be affected by your plan so they know what to expect.

Quick tip: When working with a professional, make sure they listen to your individual needs. A good one will customize the strategy to you, not offer you a template they use for every client.

6. Review Regularly

An analysis provides a snapshot of one moment in your financial life. You will need to conduct an FNA again, perhaps once a year or whenever there are big shifts, like a change in income or a rise in expenses. Each new review may necessitate adjustments to your strategy.

Common Mistakes to Avoid in a Financial Needs Analysis

When completing an FNA yourself, watch out for these common mistakes. 

• Not accounting for inflation: Remember that any expenses not locked into an agreement (e.g., a car payment) will likely rise from year to year. As a guideline, U.S. inflation has averaged 3.66% from 1975 to 2025.
• Ignoring insurance needs: Insurance helps protect your assets, so without it, all your planning could be thrown into chaos. Make sure you are adequately insured.
• Failing to reassess regularly: Make sure to review your FNA and financial strategy at least once a year or whenever there are major changes in your life.
• Overestimating returns or underestimating expenses: Keep your estimates realistic, even on the modest side, to be safe.
• Setting unrealistic goals: In the same vein, ensure that you set goals that are attainable to avoid frustrating setbacks.

Need Help With Your Financial Needs Analysis?

It is smart to seek help with an FNA. A financial professional can see things objectively and understand the larger picture. They may ask you questions you didn’t think about or challenge your assumptions about what will work. Look for a financial professional who is trained in financial strategies and licensed to handle assets you might need, such as life insurance.

You can also be your own best advocate by improving your financial literacy. As you gain more practice planning and strategizing, it will get easier.

FAQs

How often should you conduct a financial needs analysis?

Consider conducting an FNA at least once a year, and/or any time you make a major change that affects your finances. These may include buying a vehicle, starting a business, buying or upgrading a home, getting married or divorced, having a child, moving or changing jobs.

Can you do a financial needs analysis on your own?

You can do an FNA on your own, and you will likely learn a lot from doing so. However, many people find it well worth the investment to meet with a professional. This analysis can kick off a long-standing relationship with a financial professional who can help you through different life stages to help keep you on track to your goals.

How is a financial needs analysis different from budgeting?

Budgeting is one important component of an FNA, but it’s not all there is to it. While budgeting can guide your spending day to day and week to week, the FNA sets your overall strategy. If you think of budgeting like tracking your steps each day, your FNA is like your annual physical with your doctor. 

Do you need a financial professional to do a financial needs analysis?

A financial professional is a valuable partner in conducting an FNA and developing a financial strategy to meet your goals. You can go it alone, but you may miss out on the full benefit of professional training and experience.

How much does it cost to get a financial needs analysis done?

The cost of an FNA can vary. They may charge an hourly rate or a flat fee for this specific service. Sometimes, they may conduct the FNA at a low cost as the start of an ongoing relationship or part of a larger package of services. The best way to find out how much a financial needs analysis will cost is to find a financial professional near you and set up a meeting. 

Footnotes

^{1 Doe J, Smith A. Bridging the financial literacy gap through credit education. Experian. April 17, 2024. https://www.experian.com/blogs/news/2024/04/17/bridging-the-financial-literacy-gap-through-credit-education/. Accessed October 13, 2025 .}

^{2 “Financial Literacy and Retirement Fluency: New insights for improving financial well-being,” Paul J. Yakoboski, TIAA Institute; Annamaria Lusardi, Stanford University and Global Financial Literacy Excellence Center (GFLEC); Andrea Sticha, Stanford University School of Business and GFLEC; 2024.}

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The World Financial Group Insurance Agency, LLC Financial Needs Analysis, developed by WFGIA, is based on the accuracy and completeness of the data provided by the client. The analysis uses sources that are believed to be reliable and accurate, although they are not guaranteed. Discuss any legal, tax or financial matter with the appropriate professional. Neither the information presented, nor any opinion expressed constitutes solicitation for the purchase or sale of any specific product or financial service.

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