Here’s what a financial plan can do for you.

“The art is not in making money, but in keeping it.”

Sometimes making money can be a challenge. We work hard for every penny we earn. Especially in times of unrest as we face today, the challenge to keep things at bay can be overwhelming. But the art is in being able to hold on to the money we earn. To put the money to work for us. To cash in that money when we truly need it. To gain that rather elusive state of being financially independent.

Financial independence can mean different things for different people. A financial plan is the tool that can indulge your whims and personalize the solution to meet your financial needs. Not necessary that everything you desire can be provided for and therein lies the need to plan the future you can afford.

Financial planning includes every aspect of your finances. While it is essentially a book of numbers and charts, ratios and percentages, and more; there is much to be gleaned from the qualitative aspects covered as well. Numbers are the source of information that leads to an effective course of action.

Let’s talk about what a financial plan does for you:

Sets goals

A plan will make you think about all that you want to achieve. You will be asked to put down your goals and assign a number to each. If your goals are unattainable, you can prioritize them. Or postpone, cut down, or avoid them altogether. The plan will make you think about how you will get from a starting point to an end point.

Organizes your finances

The first step in planning is gathering your data. It can be a daunting task, especially if you have accumulated investments & loans over time. But once it is all put down in one place, you will have clarity of where you stand today.

Tracks your savings

Your savings is simply what you earn minus what you spend. Your plan will align these savings with your goals. It could be a short-term goal like creating an emergency fund. Or a long-term goal like funding your retirement. Either way, you put a target on these goals so you can work out how much you must save every month to reach the goal. And then track, year on year, your progress towards these goals. Fall short, and your plan will tell you by how much & how you can make up for it.

Creates peace of mind

Your plan will analyze your risks and find ways to mitigate them. The ultimate goal is to provide a sense of security and peace of mind to face any situation or emergency that may arise. With life insurance, you can ensure that your family is secure even without the support of your income. With health insurance, you can avoid the stress of an unexpected and staggering hospital bill. By making a will, you can provide your family with the peace of mind they deserve. Stress, anxiety and sleepless nights can be replaced with better quality of life.

Values your lifestyle

A plan can give you power over your money to lead the kind of lifestyle you want. By tracking your income and expenses, it can show you how to live within your means. If you are unhappy with your current lifestyle, it can provide solutions for improvement. A solid plan will tell you how much income is needed to live the life you want.

Cultivates better habits

There are healthy money habits, and good investing habits. A plan can lead to both. Financial planning isn’t just about investing, rather, it is about how it improves your quality of life. It can teach you to save regularly, record and budget, live within your means, pay off your debts, provide security through insurance & peace of mind through an emergency fund, and so on.

Increases confidence

Knowing that you can meet your goals, or that you are working towards it, can make a difference. By understanding the plan for your life, you can be confident that all your decisions are elevating your goals. It brings financial stability, and a surprising level of comfort in making decisions about money.

Your financial plan can help you irrespective of how much money you have. It can be tailored to your needs, wants, and personality. It helps you gain control and clarity of what you have. It breaks your goals into smaller manageable pieces so you can work your way towards them. When things go wrong, it can help you find your way back.

At the very least, it will get you started and build the habit of regular saving. At the very best you will find a friend in your financial planner, effectively combining an informed opinion with the knowledge of what’s best for you.

“Financial planning is about more than just good advice or investment returns. It’s about providing guidance that you can trust.”