Registered Representative, a trade publication for stock brokers, recently surveyed 88 people with incomes ranging from less than $10,000 to more than $50,000. Slightly more than half, or 52 percent, had heard the term "financial planning." Of those, most thought it was just another term for budgeting and that it was a service, not a product, the magazine noted.

According to the International Association for Financial Planning, it involves six distinct steps: collection of all relevant data, identification of goals, identification of financial problems, a written recommendation, implementation and periodic review.

The following is a financial plan based on a hypothetical family developed by two local strategists.

Most of us have certain basic financial concerns: taxes, education for our children, retirement and a little money left over each month to spend on ourselves. The family described here is similar to many in this area. Both work and have been married previously. Their concerns and some ideas to help them are discussed.

John M. Callahan, age 43, works for the federal government as an administrator. His civil service grade is GS13, Step 8. John previously was married, but has no children or financial obligations relating to that marriage.

Margaret, age 39, is an office manager for a local firm. She also previously was married and has one child from that marriage, Paul, who is now 15 years old. Margaret receives no alimony, but will receive $250 a month in child support until Paul is age 18. Her ex-husband is also responsible for one-half of all college expenses for Paul.

John and Margaret were married in 1975. They have one son, Thomas, who is 8 years old. Paul also lives with them and expects to begin college in three years.

Mrs. Sullivan, age 65, is Margaret's mother. She was widowed eight years ago and has no other living relatives. Mrs. Sullivan was recently in a traffic accident caused by a truck. The settlement from the truck company's insurance was $100,000 cash with $2,000 a month for the rest of her life (tax free). She also is receiving $600 a month from a combination of benefits from her husband's employer and Social Security.

Mrs. Sullivan owns her home, which is worth $150,000 and for which they paid $28,000 in 1963. She has no liabilities and has deposited the $100,000 settlement in a local bank earning 7 1/4 percent. Because of the accident, she has been disabled and is restricted in her activities. She is home now with a nurse, under doctor's orders. Mrs. Sullivan does not want to move from her home but sees the need to increase her income. John and Margaret have been providing $300 a month to help, but she expects that she will have to dip into her cash reserves to meet expenses, because the house will need a new roof and various repairs in the near future.

John and Margaret Callahan are somewhat conservative because of a lack of knowledge and experience. They are anxious to do something about 1) providing for Mrs. Sullivan, 2) reducing taxes, 3) increasing cash flow, 4) increasing net worth, 5) preparing for college expenses, and 6) estate planning for themselves and Mrs. Sullivan.

*Additional factors. Disability, health, homeowners and auto converage are adequate. They need to provide for one-half of college expenses for Paul, who is expected to go to a state school. They want to provide a portion of private college costs for Tom. Their wills are both dated prior to present marriage and have not been updated. Mrs. Sullivan has no will.

*Recommendations. More than $12,000 of additional income per year can be obtained through tax savings alone. Investment yields can be increased without undue additional risk. A college fund can be created and estate planning completed.

Mrs. Sullivan should sell her home to John and Margaret for fair market value, and take back the mortgage at a fair market rate. She should remain in the house and pay John and Margaret fair market rental. John and Margaret then can treat the house as investment property, deducting the mortgage interest, depreciation, repairs, taxes and other expenses incurred in maintaining the property.

Because Mrs. Sullivan is over age 55, the one-time $125,000 tax exclusion on sale of her residence is sufficent to cover the $122,000 gain, and she will owe no taxes. The mortgage interest is taxable to her, but her total tax bill (income, real estate, etc.) will drop slightly.

The net result of this sale will be to increase the income of Mrs. Sullivan by about $1,600 a month. Part of this will be needed for expenses, part will be used to fund an educational trust for the boys, and part will be given to John and Margaret to cover the expenses of maintaining the house.

Mrs. Sullivan should take the money in her 7 1/4 percent savings account and give $10,000 to John and Margaret to be used for miscellaneous expenses and their IRAs for 1984. Gifts of $2,000 should be made to each boy's educational trust. Part of the remaining money should be put in a money market mutual fund (now yielding about 10 percent), part into certificates of deposit (11 1/4 percent yield) or, perhaps, government paper, and part in a conservative equity mutual fund. In 1985 and each year thereafter, gifts of $6,000 should be made to John and Margaret for expenses and their IRAs and of $2,000 for each boy's educational trusts.

John and Margaret should take the money out of their 7 1/4 percent savings account and place part of it in a money market mutual fund (10 percent yield), use part of it to pay off credit card bills, use part to fund an IRA for each of them and place the remainder in a growth mutual fund.

Other items to be completed are: 1) a will for Mrs. Sullivan, 2) new wills for John and Margaret, 3) educational trusts for the boys, and 4) consideration of some term life insurance on John and Margaret to protect the mortgage payment to Mrs. Sullivan.

Because Paul is expected to go to UVA, college expenses borne by the Callahans will not be very high. Paul wants to work summers and obtain loans for as much as possible. He also will have the trust fund from his grandmother.

Tom will not be starting college for another 10 years. By that time, his trust fund could be in excess of $32,000 if the $2,000 a year were only invested in a money market fund at current rates. However, we suggest a quality high-yielding mutual fund for these funds to provide maximum growth.

Acknowledgements. The preceding case study, similar to those frequently seen by financial planners today, was prepared by David S. Dondero, CFP, and Amy R. Hussong, CFP, of Dondero & Associates, with the assistance of James G. McGrath, CPA, CFP, of Cavill and Co., and Gregory D. Sullivan, CPA, CFP, of DeRand Corp.