Most people realize the importance of saving and investing for the future, but only 32 percent of Americans have a written financial plan in place to help them prioritize their goals and track their progress.
If you’ve been putting off establishing a financial plan, you may want to reconsider. Following are five ways a comprehensive financial plan can help improve your financial outlook.
1. A financial plan serves as a map to guide you toward achieving your financial goals.
One of the benefits of creating a personal financial plan is that it identifies and prioritizes your goals and objectives. Achieving major goals such as planning for retirement, paying for a child’s college education, making a large purchase, paying down debt, etc. requires focus and determination. A financial plan can guide your decision-making and coordinate the various elements of your financial life to help ensure they’re working together toward achieving your goals.
2. A financial plan can help you feel more confident about your future.
A study conducted by Charles Schwab indicated that 54 percent of people with a financial plan feel confident they’ll be able to reach their financial goals, yet only 18 percent of those without a plan have the same level of confidence.
Creating a comprehensive financial plan to guide your decision-making can be a big step toward helping you feel more confident and in control of your financial future.
3. A financial plan can assist in protecting your family and managing your risk.
A comprehensive financial plan not only helps you build wealth but can also help you protect it. If not properly planned for, risks such as a medical emergency, an accident, a lawsuit, or a natural disaster can quickly jeopardize everything you’ve worked so hard to accomplish.
A thorough and well-designed financial plan will include personalized insurance and asset protection strategies to help protect your wealth and loved ones from unexpected risks.
4. A financial plan can guide your investment strategy.
Without a financial plan in place, it can be difficult to determine whether your investment strategy meets your ever-evolving needs and goals. Instead, a well-crafted plan recognizes that your investments play a crucial role in supporting you as you navigate the different stages of your financial life.
By having a financial plan in place, you can implement long-term investment strategies that allow you to take advantage of opportunities during periods of volatility while also protecting your assets against loss during market downturns.
5. A financial plan can assist you in leaving a financial legacy.
If your goals include leaving a financial legacy for the people and causes that matter most to you, it’s important to have a proper plan in place. Incorporating estate planning as part of your overall financial strategy can help ensure your assets are distributed according to your wishes and in the most tax-efficient manner possible.
Your financial plan can also help you identify opportunities to support charitable causes both during your lifetime and after your death, such as through a donor-advised fund or charitable trust.
Gene Gard, CFA, CFP, CFT-I, is a Partner and Private Wealth Manager with Creative Planning. Creative Planning is one of the nation’s largest Registered Investment Advisory firms providing comprehensive wealth management services to ensure all elements of a client’s financial life are working together, including investments, taxes, estate planning, and risk management. For more information or to request a free, no-obligation consultation, visit CreativePlanning.com.
