It is easy to avoid things that make us feel uncomfortable or exposed. Turning the lights on and looking in the corners; asking the hard questions and finding the right, most appropriate answers can require us to feel a little exposed.
Building a financial plan will be one of the most important investments in yourself and your family. And it may stretch you outside your comfort zone. However, what most people may not know is, having a comprehensive financial plan also makes you feel reassured, prepared and in control.
A financial plan is the first step to achieving your financial goals. It is important to put in the time and commitment into building the plan, as the pay-off is immeasurable when it comes to overall preparedness and comfort in knowing what your financial future looks like.
A great deal of the initial steps in building a financial plan have little to do with money and more to do with defining your hopes, dreams and expectations. During this part of the process questions like:
- What does retirement look like for us? Will we travel?
- What are our current lifestyle needs? How will they change over time?
- What do we need to save to sustain our lifestyle needs during retirement?
- What are our financial obligations – dependent children or grandchildren?
- What do we want our legacy to be? What do we need to achieve this goal?
Once you have identified your goals, the next step is to determine any challenges in the way and the options to help you achieve your goals. Your financial advisor will develop a plan with various recommendations including contingencies for your review. A good plan will be tax efficient, manage any risks you may have, and consider your investment style all while allowing you to live comfortably today.
You and your financial advisor will review and evaluate the recommendations made in the plan to choose the solutions and strategies to help you achieve your goals. Once these decisions are made, the plan can be implemented.
The final step in developing a financial plan is ongoing review. As we know life happens. Our lives change, our families grow, there are unexpected financial emergencies or windfalls, and dreams evolve. It is important to review your financial plan on a regular basis to make sure it remains structured to achieve your goals.
Contrary to popular belief a financial plan is relevant and needed for all people, regardless of net worth. Make sure you and your financial advisor invest the time and effort into building your personalized financial plan. Then commit to implementing and reviewing. You will benefit from the comfort of knowing your financial needs and goals will be met in a comfortable manner.
If you have any questions about your existing financial plan or how to find a financial advisor to work with you to develop yours, connect with us.
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