What would your future look like if money were no object? The financial planning process was created to make your dreams come true. Do you picture yourself sending your children to college, starting a business, or retiring comfortably? These are a few of the financial goals that may be important to you, and each comes with a price tag attached.

That’s where financial planning comes in. The financial planning process helps you target your goals by evaluating your whole financial picture. Once you identify your goals, strategies are tailored to your individual needs and available resources.

Why is financial planning important?

A comprehensive financial plan serves as a framework for organizing the pieces of your financial picture. With a plan in place, you’ll be better able to focus on your goals and understand what it will take to reach them.

One of the main benefits of having a financial plan is that it can help you balance competing financial priorities. A plan will clearly show you how your financial goals are related. For example, it will show you how saving for your children’s college education might impact your ability to save for retirement. Then you can use the information you’ve gleaned to decide how to prioritize your goals, implement specific strategies, and choose suitable products or services. Best of all, you’ll know that your financial life is headed in the right direction.

The financial planning process

Creating and implementing a comprehensive financial plan generally involves working with a professional to:

  • Establish and prioritize financial goals (and time frames for achieving these goals)
  • Develop a clear picture of your current financial situation by reviewing your income, assets, and liabilities, and evaluating your insurance coverage, your investment portfolio, your tax exposure, and your estate plan
  • Implement strategies that address your current financial weaknesses and build on your financial strengths
  • Create an action plan that is tailored to help meet your financial objectives
  • Monitor your plan, making adjustments as your goals, time frames, or circumstances change

reviewing the financial planning process

Who makes up your financial planning team?

The financial planning process can involve several professionals.

Financial planners typically play a central role in the process, focusing on your overall financial plan, and often coordinating any other professionals involved.

Accountants provide advice on federal and state tax issues. Estate planning attorneys help you plan your estate and give advice on transferring and managing your assets before and after your death. Insurance professionals evaluate insurance needs and recommend appropriate products and strategies.

Investment advisors provide advice about investment options and asset allocation and can help you plan a strategy to manage your investment portfolio.

The most important member of the team, however, is you. Your needs and objectives drive the team, and once you’ve carefully considered any recommendations, all decisions lie in your hands.

Can I create my financial plan?

Yes, you can create and monitor your own financial plan if you have enough time and knowledge. However, developing a comprehensive financial plan may require expertise in several areas. A financial professional gives objective information and helps you weigh your alternatives, saving you time, and ensuring that all angles of your financial picture are covered. Not only that, a financial professional provides accountability, which most of us need to stay on track.

Staying on track

The financial planning process doesn’t end once you create your initial plan. Your plan should generally be reviewed at least once a year to make sure that it’s up-to-date. It’s also possible that you’ll need to modify your plan due to changes in your circumstances or the economy. Here are some of the events that might trigger a review of your financial plan:

  • Your goals or time horizons change
  • You experience a life-changing event such as marriage, divorce, the birth of a child, job loss, or loss of a loved one
  • You have a specific or immediate financial planning need (e.g., drafting a will, managing a distribution from a retirement account, paying long-term care expenses)
  • There has been a substantial increase or decrease in your income or expenses
  • Your portfolio hasn’t performed as expected
  • Changes to the economy or tax laws

FAQs about the financial planning process

Common questions about financial planning

I get asked a lot of questions about financial planning. Check out the common ones and contact me for more information.

What if I’m too busy?

Many of our busy clients choose to meet via videoconference. You don’t even need to come into the office. Not only that, clients often take advantage of ongoing email and phone support. Don’t wait until you’re in the midst of a financial crisis before beginning the planning process. The sooner you start, the more options you may have.

Is the financial planning process complicated?

Your financial plan is tailored to your individual needs, so the complexity of the process will depend on your circumstances. Regardless of the help you need, your advisor will work hard to make the process as easy as possible.

What if my spouse and I disagree?

As a mediator, I have unique experience managing conflict between disagreeing spouses. I will listen to your concerns, identify any underlying issues, and help you find common ground.

Can I still control my finances?

Financial professionals make recommendations. You retain control over your finances. Recommendations are based on your needs, values, goals, and time frames. You decide which recommendations to follow, then I help you to implement them.

If you are interested in learning more about our financial planning process, schedule a consultation.

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