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For Your Life May 13, 2019

Why a written financial plan makes sense, and how to get started

When traveling, it is important to have a map of where you are going. The same holds true for your finances. You may have thought about your financial future but not yet taken the steps to formalize that plan. A written financial plan will provide you with the guideposts to know you are making progress towards your financial goals. A plan also makes it more likely that you will achieve your goals; whether it is to retire comfortably at a certain age, leave a legacy to children, or give back to a favorite worthy cause. The benefits of a financial plan can impact your personal well being, too. Those who have a written plan feel more confident about managing money, savings, and investments than non-planners, across all incomes, according to a 2012 survey by the Certified Financial Planners Board. In fact, 52% of those surveyed said they feel “very confident” about managing their finances, compared to 32% of non-planners. In the same survey, 48% of planners describe themselves as living comfortably, compared to 22% of non-planners.

Who needs a plan and who can help

Financial plans become most useful as life gets more complicated. You may have a growing business with assets to protect. A big promotion or inheritance may result in questions about how to manage new wealth. Children and home ownership further complicate the picture with ever-changing responsibilities. A Certified Financial Planner (CFP®) can help you create a comprehensive financial plan tailored to your goals. The CFP® designation is recognized as the highest standard in personal financial planning. Working with a CFP® allows you to leverage the knowledge of someone who has made financial planning their profession. They have the experience of dealing with a variety of situations. They can act as a double check to keep you on the right track. And they can provide the perspective of an objective third party unclouded by the emotions that can hamper effective decision making. At Old National Bank, our financial planners have a fiduciary responsibility to act solely in the client’s best interest.

A comprehensive plan works best

  • Investment analysis: An evaluation of the performance, risk, income, and liquidity characteristics of current investments and recommendations to fine-tune your portfolio.
  • Retirement planning: How to achieve the lifestyle you desire later in life. Helps keep you on track to achieve your goals and offers advice on how to maximize retirement benefits.
  • Income planning: An income analysis will identify ways to more effectively increase income, protect principal, mitigate taxes, and gauge risk.
  • Insurance: Identify risk and help you understand options with all types of insurance.
  • Saving / paying for education, especially college: Explore ways to save more tax efficiently and recommend types of accounts to meet educational goals.
  • Estate planning: Provide help in understanding the legal and tax consequences for gifting, transferring of assets and succession planning. Explain how to secure your family’s assets from creditors and divorce which can include a plan for successive generations to receive an inheritance. 

Where to start

Most people will agree that the hard part is getting started. Some people aren’t sure of their goals or are hesitant to discuss certain issues, but a financial planner can help you formulate goals based on your habits or circumstances. A comprehensive financial plan depends on solid information. Your biggest challenge might be gathering all pertinent financial information requested by the planner. Once done, however, it is the planner who will analyze the information and identify recommended courses of actions you can take giving you the best opportunity to reach your goals. The planning process gets easier with time, and once a plan is in place, it can be updated as circumstances change. In most cases, you will develop a working relationship with your financial planner as the plan is reviewed regularly or as often as you’d like. The result will be worth it because your financial situation will be more clearly understood. Your financial plan will provide you and your family with a better understanding of your goals. That alone can help improve family relationships and ease anxiety about financial matters. Those who have a plan feel more confident about managing money, savings, and investments than nonplanners; and most importantly, they are more likely than others to describe themselves as living comfortably.

Contact us today to start charting towards a smarter financial future.

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