Even Everyday Folks Need a Financial Plan

Everyone has a financial plan, whether they realize it or not. “It’s the financial life you are living right now,” explains Leslie Beck, a certified financial planner at Compass Wealth Management in Maplewood, N.J.

A person’s goals and aspirations, the choices they make everyday about how to spend, save, invest and share their money to get them where they want to go, these constitute a financial plan, said Beck. The real question is whether the choices a person is making about their financial life are steering them toward achieving their goals and fulfilling their dreams, or leading them down a dead-end road.

“A true financial plan is a well-thought out, consciously designed roadmap for how we want to live our lives,” said Beck. And you don’t have to be spectacularly rich or even modestly wealthy to justify having one. Anyone who wants a say in shaping their own and their family’s future rather than leaving it to chance may benefit from having a financial plan.

What? A financial plan is a comprehensive, objective blueprint written by a qualified financial planning professional, with your input. It details every aspect of your financial life: your income, what you own (home, investments, retirement plan assets, insurance policies, etc.) and what you owe (debts, such as a mortgage, loans, etc.). It also spells out your needs and goals for the short and long terms, from now through retirement (and perhaps beyond, to leaving a legacy to heirs), with steps and strategies for meeting those needs and fulfilling those goals.

Who? The professional who creates your financial plan should be a qualified financial planner, such as a CFP professional (a person who has earned the “Certified Financial Planner” designation from the Certified Financial Planner Board of Standards), with the skills and experience to effectively coordinate the various aspects of your financial life, from investments to insurance to retirement planning and beyond. Look for one who is objective, whose agenda is to help clients, not sell a specific product or service, and who bases their recommendations and decisions on their clients’ best interests, not their own.

Why? Simply put, people who have a true financial plan are likelier to stay on track financially and better positioned to meet their needs and goals, even in the face of a personal financial crisis or difficult economic conditions.

When? The sooner you put a financial plan in place, the better equipped you and your family will be to control your own financial destiny. Once you have a plan in place, it’s wise to revisit it at least once a year and adjust it as changing circumstances dictate.

How? Find a financial planner by visiting www.fpanet.org/PlannerSearch/PlannerSearch, a national database of financial experts maintained by the Financial Planning Association. Or ask friends, families, work colleagues and other contacts to recommend a financial planner they trust. Beck recommends speaking with at least three financial planners before choosing one with whom to work.

Financial planners typically charge a fee for their services, although free (pro bono) financial planning services may be available to people who lack the means to pay for them. Try searching Google using the keywords “pro bono financial planning” along with the name of your town or city.

Once you choose a financial planner, the process of assembling and implementing a financial plan begins. Your planner will develop a plan based on the information you provide in a meeting or series of meetings. For the far-reaching, lifelong benefits a financial plan can bring, it’s time (and money) well spent.

This column is provided by the Financial Planning Association^® (FPA^®) of Southern Colorado, the leadership and advocacy organization connecting those who provide, support and benefit from professional financial planning.  FPA is the community that fosters the value of financial planning and advances the financial planning profession and its members demonstrate and support a professional commitment to education and a client-centered financial planning process.  Please credit FPA of Southern Colorado if you use this column in whole or in part.

For more information about the FPA of Southern Colorado, please contact Susan Strasbaugh, PR Director,  at 719-265-4600 or visit our website at www.scfpa.org