...making a modest income or just won the lottery
...single, engaged, married, living with someone, or divorced (did we cover all the options?)
...newly employed or close to retirement
...you need a financial plan.
What's in a Plan?A financial plan is a comprehensive, objective blueprint that details every aspect of your financial life, including:
- Your income
- What you own (such as a home, investments, retirement plan assets, insurance policies)
- What you owe (debts, such as a mortgage, loans, etc.).
The plan also spells out your needs and goals for the short and long terms, from now through retirement, with steps and strategies for meeting those needs and fulfilling those goals. A financial plan isn't static; it's a living document that needs to be monitored and updated on regular basis to provide real benefits.
Who Can Help You Plan?You should work with a qualified financial planner, such as a professional who's earned the “Certified Financial Planner” designation from the Certified Financial Planner Board of Standards. You want to work with someone who has 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 a financial planner:
- Who is objective
- Whose agenda is to help clients, not sell a specific product or service
- Who bases their recommendations and decisions on their clients’ best interests, not their own
Why Do You Need a Plan?If you have a true financial plan, you're more likely to stay on track financially than if you don't have a plan. Your plan will help you be better positioned to meet your needs and goals, even in the face of a personal financial crisis or difficult economic conditions.
What you need to consider is whether the choices that you're making about your financial life are steering you toward achieving your goals and fulfilling your dreams, or leading you down a dead-end road. If you want a say in shaping your future (or your family's future), then don't leave it to chance. Build a financial plan.
When Should You Put a Plan in Place?The goal is to control your finances and your financial destiny, so the sooner you put a financial plan in place, the better equipped you (and your family) will be to gain that control. Once you have a plan in place, you should review it at least once a year and adjust it as changing circumstances dictate. (Getting married? Moving across the country for a new job? Getting ready to adopt or have a baby? Definitely review your plan!)
How Do You Get Started?You can find a financial planner by searching the Financial Planning Association's site which includes a national database of financial experts. You can also ask friends, families, work colleagues and other contacts to recommend a financial planner they trust. Consider speaking with at least three financial planners before choosing one with whom to work. Make sure you're comfortable with the person; after all, you're going to be working closely with him or her.
Is There A Fee?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.
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