What images come to mind when you think of financial planning? A Google image search will deliver a lot of pictures of charts and graphs and some stock photos of people sitting around pages of charts and graphs. Try it and see!
But what do those charts and graphs mean?
Why is it important?
Who should it be important to?
Now think about your personal feelings on the concept of “financial planning” based on your experiences. Does a Hollywood stylized image of the sharply dressed banker (suspenders and a Rolex, no doubt) barking orders to buy or sell into a phone come to mind? Is it the older guy/gal that your parents have used forever?
They took you to a meeting once and now you have some account that you don’t quite understand or an insurance policy that costs more than your electric bill, but you aren’t sure if you really need it or not. Maybe it’s the back of the napkin budget you scribbled down the last time you were stressed about feeling broke and wanted to be more mindful.
Truthfully, financial planning can be a lot of different things. A financial plan, in its most basic form, should provide a clear insight into your current money situation (point A), clarify your future money goals (point B), and include strategies or directions to get you from point A to point B while trying to identify and avoid pitfalls along the way.
A plan is more than investments, more than insurance, and more than products. It should be a collaboration with your partner, and it should consider the important relationships in your life. It should open difficult but necessary conversations. It should be honest about the limits of your finite resources and reasonable about the assumptions we need to make about the unknown.
It should be an exercise in mathematical concepts layered on top of behavioral challenges. It should keep you accountable while giving you confidence and hope.
Schwab says that only 33% of folks have a written financial plan. I want to change that metric because everyone should have a financial plan. Right now, you are on a path even if you aren’t on a plan.
Having a written financial plan will make that path intentional. Having a written plan will give you the guardrails to keep you on course and give you reassurance when scary times crop up. You’ll develop milestones to check your progress and foster peace of mind as you close in on your goals.
You can even develop that plan for yourself with the proper time, skill, and effort. If you are missing one of those components, it may be time to consider a professional. I’m quite capable of mowing my lawn but paying a professional lawn care company a reasonable price to handle that task saves me time and effort that adds value to my home life. I could have built my own website, but I was willing to pay the professionals a fair price for their skills to create a much better product that adds value to my business.
The right financial planner will provide that benefit to your life — valuable advice at a fair price.
When you are ready to put your path on a plan, I’m here to help! I’m enthusiastic about changing people’s lives through planning and keeping finance personal. Let’s see where you are, and talk about the life you want to build — because we can plan for that!