Financial Planning

Couple asking what is financial planning
What is Financial Planning?

Financial Planning can be defined as the ongoing process put in place to help individuals and families make sensible decisions about their money. Money that can help them achieve their goals. It is not just about buying various financial products such as stocks, bonds, 401K and life insurance, it is much more.

Financial Planning most often will involve things such as putting in place an appropriate will to protect your family. It may also include thinking about how your family would manage should your income stop in the case of an injury, getting unexpectedly ill or perhaps you die prematurely.  Financial Planning involves all of these things and putting it together into a plan. One can build a financial plan on their own, or if their needs are much more complex they may seek the assistance of a Certified Financial Planner (CFP). So what are some of the things necessary for creating a sound financial plan?

Here are six steps to get started:

  1. Establish your life goals – short term, medium term and long-term
  2. Identify and list all the assets and liabilities you have – be sure to put this in writing
  3. Evaluate current financial situations –  are you close to achieving your goals
  4. Work on and create a plan – create a roadmap on how you will achieve your goals
  5. Put your plan into action – make it happen
  6. Keep a close eye on how your plan is working and review your plan annually making certain to  adjust when needed

By taking steps to plan your finances, you will be able to meet your goals and:

  • Have a much greater confidence as to where you are going
  • Reduce stresses in your life and enjoy your life much more
  • Gain control and peace of mind through knowing whether you’re on track for the future you want for you and your family


Today More than Ever

A Certified Financial Planner™ professional can be an essential resource to any family or situation. From budgeting to planning for retirement, to saving for education, to managing your taxes and your insurance coverage. The term “finances” does not always mean just one thing for most Americans—and “financial planning” to many can mean much more than just investing and rightfully so. A Financial Planner can bring all the pieces of your financial life into one clear and well thought out plan, one that you can easily understand.

Although many professionals in the marketplace call themselves “financial planners,” CFP® professionals are far different.  CFP® professionals have completed extensive training requirements. They understand the complexities of the changing financial world and can, therefore make sound recommendations in your best interest.

Setting Financial Goals

Figuring out the financial puzzleWhat is the most expensive thing you will probably buy in your lifetime? The answer most likely is not a big-ticket item like a new TV, car or home. It is your retirement. When you add money to a retirement plan, you are “buying” your retirement. Given Social Security’s uncertain future, longer life expectancies and decreasing employer contributions, planning for this major expense is not only more complicated, it is much more critical. Many individuals can afford to retire comfortably if they develop a solid plan and make smart choices along the way.

Regardless of what your income is, a CFP® professional can help you to:

  • Calculate your net worth
  • Avoid financial setbacks
  • Deal with major life changes
  • Avoid debt and credit problems
  • Help you decide where to put your money


Tips for Success

You are ultimately in charge of your finances, and the results you get from working with a CFP® professional depend on your commitment and understanding of the process. These tips can help you avoid common mistakes:

Set measurable financial goals
Create specific targets for what you want to achieve and when you want to see results. Everyone wants to be “comfortable” in retirement and see their children attend “good” schools—but what do you mean by comfortable and good? Clear goals are easier to aim for and measure.

Understand the effects of each financial decision
Remember, each piece of your financial life is part of a larger puzzle. For example, an investment decision may have tax consequences that are harmful to your estate plans. Or a decision about your child’s education may affect when and how you meet your retirement goals. Your financial decisions are interrelated.

Re-evaluate your financial situation periodically
Financial planning is a dynamic process. Your financial goals may change over the years due to changes in your lifestyle or circumstances such as an inheritance, marriage, birth, house purchase or change of job status. Revisit and revise your financial plan as time goes by so you stay on track to meet your long-term goals.

Start planning as soon as you can
The earlier you begin, the more likely you are to achieve your financial goals. By developing good financial planning habits such as saving, budgeting, investing and regularly reviewing your finances, you will be better prepared to handle emergencies and life changes.