Financial Planning
Stop setting goals. Goals are pure fantasy unless
you have a specific plan to achieve them. – Stephen Covey
As life gets more complex, so do our finances. With children, grandchildren, retirement, large purchases, vacations – what have you – you can feel pulled in far too many directions. What once seemed like a clear path becomes more complicated journey with lots of twists and turns. So to keep moving forward, we suggest you get a map – in the form of a comprehensive financial plan to chart your course.
Why a Financial Plan Makes Sense
First, a financial plan is about developing a realistic and informed perspective on how you can put all of your financial resources to their best use. The process starts by examining and articulating your goals (some that you've already thought about, and some that may not be obvious), and then sorting out your priorities. This can be an excellent opportunity for you and your spouse to step back, rethink and agree on what's most important to you.
Second, a successful financial plan is holistic. It looks at all the interrelated parts of your financial life – income, expenses, investments, retirement planning, the role of insurance and risk management, income tax liability, estate planning needs and desires – to make sure they're all coordinated. This is essential because if you don't have a handle on how much money is coming in and going out every month, it's next to impossible to know how much you can save or if your retirement ready. If you don't have a savings plan, you won't be able to manage your most important goals like buying that bigger home, paying for your children's education, or funding a comfortable retirement without outliving your assets. If you don't have adequate insurance, you may not be able to protect the savings in the face of some unexpected event like a job loss, critical illness or death.
Finally, a good financial plan will include a series of concrete recommendations. Otherwise, your experience remains an academic exercise: interesting, perhaps, but not that useful. The goal of a financial plan, after all, is to make your goals a reality!
