Financial Planning: Helping You See the Big Picture
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 target 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 will clearly 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 know that your financial life is headed in the
The financial planning process
- Creating and implementing a comprehensive financial plan generally involves working with financial
- Develop a clear picture of your current financial situation by reviewing your income, assets, and liabilities, and evaluating your insurance coverage, your investment portfolio, your tax exposure, and your 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 help 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.
Financial planners typically play a central role in the process, focusing on your overall financial plan, and
often coordinating the activities of other professionals who have expertise in specific areas.
Accountants or tax attorneys provide advice on federal and state tax issues.
Estate planning attorneys help you plan your estate and give advice on transferring and managing your assets before and after your death.
Insurance professionals evaluate insurance needs and recommend appropriate products and strategies.
Investment advisors provide advice about investment options and asset allocation, and can help you plan a strategy to manage your investment portfolio.
The most important member of the team, however, is you. Your needs and objectives drive the team, and once you’ve carefully considered any recommendations, all decisions lie in your hands.
Why can’t I do it myself?
You can, if you have enough time and knowledge, but developing a comprehensive financial plan may
require expertise in several areas. A financial professional can give you objective information and
help you weigh your alternatives, saving you time and ensuring that all angles of your financial picture are
Staying on track
The financial planning process doesn’t end once your initial plan has been created. Your plan should
generally be reviewed at least once a year to make sure that it’s up-to-date. It’s also possible that you’ll
need to modify your plan due to changes in your personal circumstances or the economy. Here are
some of the events that might trigger a review of your financial plan
- Your goals or time horizons change
- You experience a life-changing event such as marriage, the birth of a child, health problems, or a
- You have a specific or immediate financial planning need (e.g., drafting a will, managing a
distribution from a retirement account, paying long-term care expenses)
- Your income or expenses substantially increase or decrease
- Your portfolio hasn’t performed as expected
- You’re affected by changes to the economy or tax laws
Common questions about financial planning
What if I’m too busy?
Don’t wait until you’re in the midst of a financial crisis before beginning the planning process. The sooner
you start, the more options you may have.
Is the financial planning process complicated?
Each financial plan is tailored to the needs of the individual, so how complicated the process will be
depends on your individual circumstances. But no matter what type of help you need, a financial
professional will work hard to make the process as easy as possible, and will gladly answer all of your
What if my spouse and I disagree?
A financial professional is trained to listen to your concerns, identify any underlying issues, and help
you find common ground.
Can I still control my own finances?
Financial planning professionals make recommendations, not decisions. You retain control
over your finances. Recommendations will be based on your needs, values, goals, and time frames. You decide which recommendations to follow, then work with a financial professional to implement them.