the power of financial planning

by Tom McKeon

Investment Adviser Representative at

Infinex

Most of us tend to coast along during prosperous financial times, and often don’t pay much attention to the “what-ifs” in our own personal financial plans until something goes wrong. Now that we’re going through a period of financial uncertainty and instability many are becoming more concerned about what may happen next, and those ever present what-ifs are starting to get a lot more attention.

I have been speaking candidly recently with my clients about their finances, and focusing on the things that are in our control rather than those that aren’t. Proactive financial planning is one of the things that is in our control. The simple fact is that regardless of what the overall economic picture looks like we all should have a financial plan in place that adequately considers the effects of unforeseen events that could have a negative effect on our financial well being. In times like these we can all maintain a higher level of individual security and comfort if we have a well formulated financial plan in place. In fact even those who have done planning in the past should revisit and review their plans in context of the current financial environment.

Comprehensive financial planning is a process that considers your finances holistically rather than addressing each of the individual pieces separately without concern for how they work together. Your current financial situation, investment planning, retirement planning, insurance planning, tax planning, and estate planning are all areas that need to be considered together to create a comprehensive financial plan. Simply put, comprehensive personal financial planning empowers us to understand where we stand financially, and allows us to make adjustments if necessary.

The steps you need to take to develop and maintain an effective comprehensive financial plan for yourself are:

1. Gather Info and Define Goals. Pull together all of your financial documents and information to determine your starting point today. Establish what you want to accomplish from a financial point of view and what things you want to protect against.

2. Evaluate your current financial situation. Are you on track to meet your goals? Are you adequately protected? If not, what changes do you need to make?

3. Develop a plan of action. Review the options available to you, and decide which products and services are best suited to help you adjust your current situation so that you can get on track to meet your goals and appropriately transfer risks to protect you in the event of unforeseen events.

4. Implement solutions. Make the changes needed according to your plan. You must take action! All the planning in the world is useless unless you put the solutions in place.

5. Monitor your plan. Review your plan on an ongoing basis to make sure you stay on track, and make adjustments to changes in your personal situation as well as the overall economy and financial markets.

There is a wealth of information out there on financial planning, including online sites, books, calculators, and software, etc. For some there are sufficient resources available to go through the financial process on their own. For many, however, the lack of expertise and time coupled with the difficulty to take an objective point of view regarding their own personal finances make it more appropriate to work with a trusted, qualified professional. This adds one more step to the financial planning process; The first step when working with a financial planner is to establish the relationship, define the scope of the planning you intend to undertake, and commit to implementing solutions. This generally takes place during a complimentary consultation where you will bring all of your personal information and together you will begin evaluating your current financial situation and defining your financial needs and goals.

Whether you do it yourself or choose to work with a professional, the times we live in dictate that you must develop and implement a comprehensive financial plan. The enclosed Client Factfinder will help you start getting everything in one place, and begin to think about your hopes, dreams, and goals, etc. The next decision is yours; Either begin using the resources available to start developing a financial plan for yourself, or reach out and make contact with a qualified financial planning professional who can help take you through the process, and give you the valuable advice you need.