OK, as a Certified Financial Planner® professional, I will say it: Happy World Financial Planning Day!
The Financial Standards Planning Board* promotes the day (designated as Oct. 3) to raise awareness about the importance of investor education and protection. But, you know, Financial Planning (capitalizations intentional!) is more than just a day, right? What if I told you it was a lifelong journey?
What is Financial Planning and why should you care?
Investopedia defines Financial Planning as “a comprehensive evaluation of an investor's current and future financial state by using currently known variables to predict future cash flows, asset values and withdrawal plans.”
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
In other words, it is a plan to help you use what you have to attain the life you want. It is a way of benchmarking and goal setting as you earn, save, invest, give and spend money.
People with Financial Plans know what they have, and they know where they are going. They have peace of mind because their assets and liabilities and income and expenses are all known quantities.
Personal finance can be more complex than it used to be a generation or two ago. Most of us need Financial Plans to have the peace of mind to enjoy our lives.
Sifting through the noise of World Financial Planning Day
While you will see many articles throughout the month of October (also known as Financial Planning Month) that make helpful suggestions on how to handle “the holidays” financially, starting a savings plan and consolidating debt, don’t let them distract you from the big picture. That’s what this month really should be about.
I believe that Financial Planning is about more than what spreadsheets you can create today or where you can move money (or allocations) around this month. Financial Planning is about defining where you want to be financially in three years, five years, 10 years or by the time you are “retirement age” AND defining the path to get there.
How to ‘Celebrate’ This Day
So, my advice to you following this World Financial Planning Day? Just one thing: Reach out to a Certified Financial Planner® professional in your community who shares this long-range view and ask them if they will work with you on a plan.
There is not a single element of our lives that is not affected by financial planning.Like me, many CFP® professionals share a passion for helping our clients plan to achieve their life financial goals. Financial planning is intellectually stimulating, emotionally gratifying and financially rewarding — and it delivers positive societal impact to our community.
On a personal note, I wholeheartedly believe that I am truly fortunate to have found my calling. If I had not discovered this career, I don’t know if my family and community would have enjoyed the freedom and richness of life that a financial plan can offer.
Here are some questions to ask yourself today:
- When do I want to be able to stop working if I want to?
- How much money do I want to have in savings by the time I stop working?
- Who is dependent on me, and how will they be taken care of when I am gone?
- How much money would I need to live with dignity in my golden years?
- How do I define financial independence?
- Am I on track to be living my dream when I no longer need to work?
Financial planning is a lifelong journey. As I always say, don’t measure your self-worth by your net worth. EVERYONE deserves a Financial Plan.
*The Financial Standards Planning Board, Ltd. (FSPB) is the organization that oversees the accreditation for Certified Financial Planner professionals and the “CFP®” distinction that many people in my industry (including yours truly) has at the end of their name.
-
Why Does the Fed Prefer PCE Over CPI?Inflation has been top of mind for lots of folks in recent years. Most of Wall Street follows the CPI but the Fed favors the PCE. Here's why.
-
Five Great Places to Live in WyomingWhether you prefer the buzzy affluence of Jackson Hole, rodeo towns or mountain towns, Wyoming should be on any nature lover’s list.
-
How to Age-Proof Your Retirement PlanLongevity risk is a big threat to your retirement, but there are several strategies to protect yourself from running out of money, no matter how long you live.
-
Retirement Planning for Couples With a Generation GapDo you and your partner have different retirement timelines and attitudes to saving? It is possible to make plans together. This is how one couple did it.
-
How to Replace a Corporate Trustee (and Make Other Trust Changes)The right choice of trustee today may not be the right choice for trust beneficiaries in the future. Here's what you should know.
-
How Building Liquidity Into Your Retirement Plan Can Pay OffTo succeed in investing for retirement, you need time and discipline — liquidity can give you both.
-
Striking Oil in Opportunity Zones: Now Might Be the Best Time to InvestYou could unlock hidden wealth in QOZs with strategic oil and gas investments, potentially combining tax advantages with long-term growth in an essential industry.
-
What You Don't Know About Annuities Can Hurt YouLack of awareness leads many to overlook these potent financial tools, and with the possibility of running out of money in retirement, that could really hurt.
-
Three Keys to Logical Investing When Markets Are VolatileFocusing on these market fundamentals can help investors stay grounded rather than being swayed by emotion or market hysteria.
-
Winning Strategies for Financial Advisers as Clients' Lives EvolveHow can the wealth management industry help make life transitions easier for the adviser and the client?
