Do you have a comprehensive financial plan? If you’re like most Americans, probably not. According to a study from the Certified Financial Planner Board of Standards, only 19 percent of Americans use a comprehensive financial plan. The remaining 81 percent either don’t have any type of financial plan or have one only for specific financial goals.1
What is a comprehensive financial plan? It’s a document that analyzes every aspect of your financial life. It identifies your goals and objectives, and it lays out strategies you can implement to achieve your objectives.
There are a variety of reasons why most Americans don’t have a comprehensive plan. Some may feel they don’t need that type of planning. Others may feel that the planning process would be too time-consuming. And some may believe that their current planning sufficiently covers every aspect of their financial life.
Whatever your reason for not having a comprehensive plan, now may be the right time to consider one. If you don’t have a comprehensive plan, you could be missing out on opportunities or unaware of potential financial threats. Below are three ways in which a comprehensive plan can help you take control of your financial future:
It helps you prioritize your goals.
You probably have many different financial goals. You may have a specific retirement age in mind, and you may have a desired standard of living that you want to enjoy after you retire. Perhaps you want to save for your child’s education so they don’t have to struggle with the burden of student loan debt. There may be large purchases you want to make, like an overseas vacation or a beach house, or maybe you want to start a business.
With so many goals competing for your limited attention and resources, it can often be difficult to know which goals deserve your focus. A comprehensive financial plan provides analysis of your goals so you can see which ones will require the most effort and resources.
You can then prioritize your goals so you know where to direct your savings and your attention. If you don’t prioritize your objectives, it’s difficult to achieve them in any kind of strategic way.
It shows you how your financial objectives are intertwined.
Without a comprehensive financial plan, it also may be difficult to see how your financial goals are interconnected. For example, if you save money for your child’s education, that may limit the amount you can save for your retirement. Or if you accumulate a sizable amount of retirement assets, you may need to reassess your estate planning.
The various aspects of your financial life are all interconnected. A decision in one area will likely impact other areas. A comprehensive financial plan allows you to see how your goals are connected to one another and how your decisions affect your ability to achieve your objectives.
It helps you manage and minimize risk.
Are you fully aware of all the financial risks you might face? Many people are not. Unfortunately, they then find themselves unprepared when a financial threat becomes reality.
For example, what if you were to pass away at a relatively young age? What risk would that post to your loved ones? What if you or your spouse required long-term care in retirement? How would that impact your finances? What if you became disabled and were forced into early retirement?
The good news is there are a variety of strategies you can implement to minimize these risks and more. However, you have to be aware of the risks to take action. A comprehensive financial plan highlights these risks and provides a mitigation strategy.
Are you ready to create your comprehensive financial plan? Let’s talk about it. Contact us at Spicer Wealth for more information. We can help you analyze your needs and goals, and then develop a strategy. Let’s connect soon and start the conversation.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.
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