Why Financial Planning Is Important

Why Financial Planning is Important

Heading into the final quarter of the year and into the holiday spending season, October is the perfect time to do a health check on your financial fitness. Take advantage of this month to create your own financial plan and meet with a financial expert to ensure your retirement plan is on track. Learn more about the importance of having a financial plan during National Financial Planning Month.

Updated on Dec 17 2019

Why You Need a Financial Plan

Defined as a “comprehensive statement of an individual’s long-term objectives for security and well-being and detailed savings and investing strategy for achieving those objectives”, a financial plan is crucial to having a financially secured future. An ideal example of a financial plan should include a retirement plan, a risk management strategy, a long-term investment plan, a tax reduction strategy, and an estate plan.

1. To know where you are

Before you know where you want to go, you need to understand where you are. You can not create a financial plan without knowing your current net worth, current budgetary obligations, and where you can cut back spending to increase savings.

Conduct a financial planning assessment by looking through your checking account and credit card statements, which should help you understand where you are spending money. Go through an entire year because expenses can vary seasonally. Knowing where you are is the first step in creating a financial plan. This will help you evaluate your spending and potentially allow you to contribute more to savings and retirement.

2. To get where you want to go

Every person’s retirement looks different, and for some, retirement even includes some level of work. Even if your dream retirement means having an income, chances are that your income could dip drastically in retirement. If you want to maintain the same standard of living, or add travel, or money spent on a new hobby, you will need to have a financial plan that takes all of that into consideration.

A financial plan can help you achieve these goals in a thoughtful, intentional, and purposeful way.

3. To be prepared for life’s big events

Graduations, weddings, and retirement are all big events in our lives that are all things to be celebrated. But, celebrations can be costly can stressful when not thought through on a financial plan. Having a financial plan that includes your daughter’s wedding, your spouse’s graduation party, and your own financial future is crucial to being able to truly celebrate life’s celebrations, and not be stressed about who is paying for the party.

Getting Expert Advice for Your Financial Plan

Creating a financial plan is best done with the assistance of a fiduciary financial advisor. A fiduciary financial advisor is held to a legal and moral obligation to put your interests above their own. They are not paid a commission to sell financial services to you, meaning that you can trust their advice is best for your unique financial situation.

Working with a financial advisor early in your financial plan can help you ensure your goals are being met in a timely and effective way. Contact a fiduciary financial advisor and get your finances set up for this holiday season and the new years to come!

Find an Advisor Near You

Advisors by City

Find advisors located in the cities nearest you.

Need a financial advisor?

100% free consumer service

Back to Top