Do You Need a Financial Plan?

  • Julie Wielehowski, CFP® ChFC®

Whether you are ready to retire, young and just beginning to work and save, planning or raising a family, or just thinking about that next phase where you have the freedom to reduce working, completing a financial plan is an essential part of being in control of your future. Taking inventory and assessing your means & needs are essential to your financial well-being. Working through, and maintaining, a financial plan can help you get organized, set and assess goals for the future, and free up your time (believe it or not!) by reducing the time you spend worrying about the future.

Getting organized is usually the first step and it involves understanding cash flow, reviewing tax returns, and taking an inventory of assets and liabilities. Modern technology has made this part of financial planning incredibly easy by allowing online access to historical data (think spending transactions and how that can help set a realistic budget) and even daily balance and holding updates from investment accounts right into the financial planning software. While it is still possible to gather a box of paper statements and bring them into the office, it is no longer necessary. I have found these advances in technology have greatly reduced the burden of data gathering for the client, and I use them whenever it makes sense. Of course, technology comes with its own set of issues, which I wont get into here, and so for some folks the box of documents is the preferred method- and that is OK too!

The next step in the process involves thinking about what you want … how you would like to live in the here & now but also in the future. By creating planning targets, we can begin to assimilate the information into a roadmap to get there. The goals don’t have to be perfect, or even specific, but they do serve as a general guideline for what kind of living is- and is not- acceptable for you. Your goals will change. Over time, they will. Its just the nature of the beast. And its OK. Getting them perfect- and waiting until you have the perfect, specific goals before you begin planning -will only drive you crazy and prevent you from doing any real planning at all.

At this point, the plan begins to come alive. By this I mean that while we will sit in the office and have a “delivery meeting”, in no way should that indicate we are done and the plan complete and will be static. In fact, the plans are dynamic and can be tweaked, monitored, and absorbed through your online access, in the privacy of your own home. You can actually see, real time, using your own data, how changing things like retirement age, savings rates, cost of living, asset returns, social security cuts, just to name a few, impact YOU.

And that is where the “worry less” part comes in. When you have a plan to slay the dragon, the dragon just isn’t so scary anymore.