Do you picture yourself owning a new home, starting a business, or retiring comfortably?
These are a few of the financial goals that may be important to you, and each comes with a price tag attached.
That’s where financial planning comes in.
Financial planning is a process that can help you reach your goals by evaluating your whole financial picture, then outlining strategies that are tailored to your individual needs and available resources.
Why is financial planning important? A comprehensive financial plan serves as a framework for organizing the pieces of your financial picture. With a financial plan in place, you’ll be better able to focus on your goals and understand what it will take to reach them.
One of the main benefits of having a financial plan is that it can help you balance competing financial priorities. A financial plan clearly will show you how your financial goals are related – for example, how saving for your children’s college education might impact your ability to save for retirement.
Then you can use the information you’ve gleaned to decide how to prioritize your goals, implement specific strategies, and choose suitable products or services.
Best of all, you’ll have the peace of mind that comes from knowing that your financial life is on track.
The financial planning process
Creating and implementing a comprehensive financial plan generally involves working with financial professionals to:
• Develop a clear picture of your current financial situation by reviewing your income, assets, and liabilities as well as evaluating your insurance coverage, investment portfolio, tax exposure and estate plan.
• Establish and prioritize financial goals and time frames for achieving these goals.
• Implement strategies that address your current financial weaknesses and build on your financial strengths.
• Choose specific products and services that are tailored to meet your financial objectives
• Monitor your plan, making adjustments as your goals, time frames or circumstances change.
Some members of the team
The financial planning process can involve a number of professionals, including financial planners, accountants or tax attorneys, estate planning attorneys, insurance professionals and investment professionals.
The most important member of the team, however, is you. Your needs and objectives drive the team, and once you have carefully considered any recommendations, all decisions lie in your hands.
Don’t wait until you’re in the midst of a financial crisis before beginning the planning process. Each plan should be tailored to the needs of the individual. A financial professional is trained to help couples find common ground when they disagree. Financial planning professionals make recommendations, not decisions.
Send financial questions you wish to have answered in this column to Dorion-Gray Retirement Planning Inc. Fax them to 815-455-4989, or email firstname.lastname@example.org.
• Paula Dorion-Gray, CFP, is president of Dorion-Gray Retirement Planning Inc., 2602 Route 176, Crystal Lake.