The Value of Having a Financial Plan

When we meet with prospective clients, most have a plan in their mind on how their retirement or financial life will play out. As financial planners, our job is to extract that plan and the details around it from clients and develop a comprehensive plan to test it and determine if everything will work out as the client intended. Once we can put it in action and test that plan is when clients experience the real value of financial planning.

Here are some of the main benefits of building a plan.

Help define and achieve goals:

You can express what goals are important to you, quantify them, and then determine what is needed to achieve them. It sets direction for clients and gives them something to focus on. A major goal for most people is retirement and by defining that goal, a financial plan can help develop a savings plan to one day reach it.

Help make life decisions:

Our lives are changing every day and new life events always present themselves. Whether it is a new job offer, having a newborn baby, or a new home purchase, there are financial ramifications to life’s changes.   When you build a financial plan, you can determine how any potential changes or major life events will affect your plan and move forward knowing feeling confident in any decisions that you make.

Know what adjustments need to be made:

Once you’ve built an initial plan, you will know if your goals are achievable, and if not, a plan will outline what needs to be changed to help you achieve them. Changes to your plan can come in the form of spending less money, increasing your savings, pushing back your retirement date, and increasing or decreasing your investment risk. These are the things that you can control to help you achieve your goals.

Determine your investment risk:

Something that most people don’t consider and don’t know how to answer is how much investment risk they should be taking. Often, prospective clients come to us with an investment portfolio which is too conservative for the goals they want to achieve, or they are taking on added risk that is not needed. When you build a plan, you can have comfort in knowing that your portfolio is allocated in a manner that is appropriate to achieve your goals and dictated by your financial plan.

Increase your confidence:

Money and financial security is widely known as one of the biggest stressors in people’s lives. We often hear from clients that the biggest benefit of having a set financial plan is having the confidence knowing that they are going to be ok financially and don’t have to worry about money. This is a huge reliever for people and gives them assurances that they are on the right track to financial freedom.

If you’d like help building a financial plan and testing it, please don’t hesitate to reach out.