If you worry about money, you are like many people. A recent financial poll demonstrated that two-thirds of respondents felt anxious about their long-term financial situation, yet less than half of that actually seek formal help in making changes to their bottom line.
Fortunately, getting help isn’t nearly as complicated – or as expensive – as you might think. Whether you make only a little bit of money and are worried about making ends meet, or you have a six-figure salary and are wondering how to make your money work for you, everyone can benefit from financial planning.
What is Financial Planning?
Financial planning is the process of meeting your life goals by properly managing your finances. It can be done by yourself or in conjunction with an investment professional. The basic steps to creating a financial plan include:
1. Establish goals. What are the goals you want to achieve? Do you want to get out of debt? Buy a home? Establish wealth? Figuring out where you want your money to take you will help you find a reason to start saving and investing.
2. Gather data. Once your goals have been established, it’s time to gather all your financial data. This can include things like your tax returns, insurance polices, bank and brokerage statements, etc.
3. Evaluate your financial status. After you have all your documentation in one place, it’s best to meet with a qualified financial planning advisor who will help you make sense of your financial situation. The objective point of view will help you reach new conclusions about yourself and your finances.
4. Develop a plan. After you and your financial planning advisor have gone over your status, your advisor will help design a plan that is right for you. Depending on your goals, this may include setting a budget, creating an investment plan, or planning for your estate.
5. Implement the plan. Once your financial plan has been developed, it is up to you to implement it. This can take anywhere from a few months to the next twenty years.
6. Monitor. Once the plan has been implemented, you should get together with your financial planner from time to time to evaluate how it is working for you. Most investments are long-term, so you can most likely anticipate having annual reviews. Of course, if your life changes through job change or loss, marriage, divorce or another unforeseen circumstance, you should visit your financial planner. Your planner will review your plan and help you make any changes necessary to accommodate your new circumstances.
Benefits of Financial Planning
One of the key elements to financial planning is understanding where you want to go and how your money will help take you there. By examining your life goals and understanding how your finances will help you reach those goals, you can make educated and meaningful decisions about your finances.
Having a good financial plan in place can help you meet your financial goals such as getting out of debt or purchasing a home. A good financial planner can also advise you on how to protect your family and possessions financially in case of emergency.
Questions? Email me at wesley@thewandwgroup.com and visit our website at http://www.thewandwgroup.com .
Comments and questions are welcome, but because of the volume of email, personal responses are not always possible.
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