Financial planning and flossing in the same sentence! Who'd have thought?
Submitted by KWB Wealth Managers on October 23rd, 2019
I wanted a happy, uplifting article for October and I soon remembered, October is financial planning month! Now, I’m the first person to think the National Day trend has gone too far with offenders such as “May 9, National Lost Sock Memorial Day” and of course the upcoming “November 12, National Pizza with the Works Except Anchovies Day.” I’m excited however that my profession was given a dedicated month!
Financial planning, like flossing, is one of those things we know we need to do, but don’t do enough. Financial planning can be as simple as creating a budget, paying bills on time and starting to save. Because it can mean so many things, I’ll focus on what it means to me.
Helping my community plan for a fulfilling, sustainable retirement is absolutely my favorite part of working as a financial advisor. Creating a financial plan helps me connect with the families I assist on a much deeper level. To me, a great financial plan begins with listening to what’s most important to the client. For some people, that may be simply not running out of money; while others have very specific hopes of taking one or two large trips each year or passing along a legacy to their children/grandchildren. A complete financial plan helps clearly identify what a client needs and what they additionally want. Most importantly, it helps determine the feasibility of those needs and wants.
KWB uses industry-leading financial planning software to help people answer some of the most pressing questions regarding retirement:
--When can I retire?
--What are the most effective steps to take between now and retirement?
--Will my money last my lifetime?
--How much risk do I need to take with my investments?
--When should I begin collecting Social Security?
A complete financial plan helps provide a window into the future based on the assumptions inputted into your plan. You can visualize whether you are spending too much in retirement and potentially depleting your retirement savings, or, my favorite—not spending enough and potentially passing along more wealth than you’d want. Essentially, a good plan helps you make confident financial decisions.
If you’re looking for some actionable steps in celebration of financial planning month, start with examining your household cash flow. Compare the inflows versus outflows (your bills and spending) for a few months in order to get a sense of where your money is going. This is also a great exercise to help you determine how much money you’ll need in retirement to maintain your standard of living. When I did this personally, I discovered that I spend much more than I thought on eating out for lunch. Next, I encourage you to jot down some financial aspirations you want to attain. Yes, actual pen to paper is very important! People who write down what they want to achieve are 42% more likely to achieve it.
A great financial plan will help direct how your money should or shouldn’t be invested. In other words, your plan should dictate your investment strategy. I personally don’t like driving that much (most Californians likely feel this way), so when I am driving, I always have a specific destination. What you want to achieve with your wealth is that destination, a financial plan is the road map to get there, and a great financial planner is your navigation system to always steer you to the best path while monitoring your blinds spots and helping avoid roadblocks along the way.
Happy financial planning month!
-Mike Razzouk
