I could get lost trying to find my way out of a paper bag, so I use a GPS for successful navigation. So long as I tell it where I want to be, it gets me there with step-by-step directions and even detours if I come up on obstacles like construction or closed roads.
I can view my whole route in advance, make changes should I stop along the way, or even change my destination mid trip! I don’t have to constantly monitor it — it updates as we go and keeps me informed of the right direction.
Financial plan is a tool
A financial plan is like a GPS. A GPS is a tool for navigational success, and a financial plan is a tool for fiscal success.
Do you dream of leaving a legacy to your church, or imagine yourself having a vacation home up north, or do you just want to know you have enough for retirement after paying college costs for your children? A financial plan is a tool to help you achieve your dreams and reach your goals.
Financial planning is a process of evaluating your whole financial picture providing you a clear snapshot of where you are today, then outlining strategies that are tailored to your individual needs and available resources.
A comprehensive financial plan serves as a framework for organizing the pieces of your financial picture. With a financial plan in place, you’ll be better able to focus on your goals and understand what it will take to reach them.
It shows you how your goals are related — like how college costs will impact your retirement. It helps you prioritize your goals and helps you choose suitable services and products. Using a financial “GPS” can give you direction and peace of mind, knowing you are on track to reach your financial destinations.
Addressing your concerns
Some of the concerns that financial planning can address include funding emergency reserves, investments, retirement goals, tax planning, education savings, estate plans, and insurance needs for risk management.
Once your original plan has been created, it should generally be reviewed at least once a year to keep it updated. You may need to modify your plan due to changes in personal circumstances or the economy. Some events that might trigger a plan review would be:
- Your goals or time horizons change.
- You experience a life-changing event such as marriage, the birth of a child, career change, or loss of a spouse.
- You have a specific or immediate financial planning need (e.g., estate planning, managing a distribution from a retirement account, paying long-term care expenses).
- Your income or expenses substantially increase or decrease.
- You’re affected by changes to the economy or tax laws.
Don’t wait until a crisis
Who should have a plan? Well, your financial “GPS” is just like a navigational GPS: everyone from the unskilled and inexperienced to the proficient and accomplished needs and can use direction for both short and long journeys.
The list of events that can trigger the need for a plan or a plan review are common to us all. 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, and the better your chance for success at reaching your financial destinations.
If you would like a free initial consultation, contact me at the e-mail address below.
Kitty Maas is a financial advisor with Waddell & Reed, an investment and financial planning company. She contributes to the Catholic Herald to answer your financial questions. You can sign up for her quarterly newsletter and direct your questions for her to [email protected] All information and questions will be handled confidentially and published without names. The preceding article is meant to be general in nature and should not be construed as investment or financial advice related to your personal situation. Please consult your financial advisor prior to making financial decisions. Waddell & Reed, Member SIPC.