Financial professionals are hired for a variety of reasons. Often many engagements begin with the objective of solving a particular concern. Usually a triggering event, both positive or negative, may lead someone to seek a second opinion or design a strategy that accomplishes an economic goal. Understanding the facts and numbers is an important part of the discovery process, but that represents only half the story. The other half is understanding the feelings and beliefs this individual holds around their money. Whether we realize it or not, we are all a product of our prior environment. How our parents handled monetary decisions when we were young very much influences our financial actions today.
When the planner presents the solution, it may arrive by balancing all the above inputs into a detailed recommendation. The output, a financial plan, will provide action steps to tackle the immediate need and offer a path forward on other financial choices.
Once created and delivered, the financial plan slowly becomes dated as our lives are consistently changing. By not revisiting the plan annually it may slowly lose its purpose. It takes follow through to continue to check in with your financial professional to ensure small or large changes are accounted for. These life events may impact the original assumptions and the why behind creating the plan in the first place. Values and priorities may shift as we get married, start a family, switch jobs, retire, and become a grandparent one day. Because of this, a financial plan needs ongoing attention and updates. Much like a plant requires light and water to grow and flourish, your financial plan needs ongoing dialogue to stay relevant.
One of the challenges in completing your plan is knowing what you want. Setting goals is not always natural or easy and that’s where a planner comes in. Someone else to bounce ideas off of, talk about possibilities, and help you verbalize what matters most to you. Goals may be large or small, short term or long term, and are often impacted and funded by cash flow. A larger goal may be funding college costs for children or accumulating a certain level of wealth. Perhaps zeroing out all debt is a priority or the purchase of a second home. Other goals may be more difficult to define and require time. These may include professional goals to increase your employment choices. It may also require thinking about what you may want decades from now. Determining your next chapter when you leave your employer and repurpose your time one day may not be as clear and in focus as you think. More travel, time with friends, or learning a new language may be a start. Reflecting on your values may provide clarity in goal creation. Goal setting is the backbone to financial planning and clarifying that over time with someone you trust makes a difference in your tomorrow.
A financial planner may offer some outlines as you explore your goals and articulate them together. It’s important these goals remain your own. Think of a planner as a conversation facilitator and not a dictator. No one likes being told what to do especially when it comes to their money. A better approach is a collaborative process that’s based on your goals, your financials, and your time. This includes planning with a spouse as this presents another perspective and viewpoint to be factored in. Not all spouses share the same goals and that’s ok. By listening and asking clarifying questions, a planner may help both spouses work towards what’s important individually and also as a couple. Without clarity it will be difficult to accomplish your goals regardless of income or financial resources.
Financial planning requires goal identification, a repeatable process, and consistency to get closer to what matters to you. Often your journey begins in a direction with a plan only to be updated and rewritten as life plays out. That’s ok as your plan doesn’t have to be perfect to pay off in the long run. The biggest impact is exploring ideas and clarifying choices overtime. If you would like to discuss your goals and feel excited about what you are working towards please reach out. It all begins with a conversation.