It's World Financial Planning Day!
Submitted by Robert Gordon & Associates, Inc on October 4th, 2018
The Financial Standards Planning Board promotes the day 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."
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.
We 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, our 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 us, 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.
Here are some questions to ask yourself today:
- When do I want to be able to stop working for the paycheck?
- 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 we always say, don't measure your self-worth by your net worth. EVERYONE deserves a Financial Plan.
