It’s Time to Do a Good Financial Plan

It’s the top of the new year and besides making New Year’s resolutions to lose weight, stop smoking, eat healthier, etc., it is time to prepare a good personal financial plan. Whether you are a young couple, an entrepreneur, an executive nearing retirement, a divorced woman after the divorce or a senior, a financial plan is essential to your personal financial well being. After all, it is obvious that you cannot rely upon the government to help you out over your lifetime, especially as the average life spans are growing longer than those of the previous generation and the federal government has a huge deficit that needs to be managed. The reality is that no one can take better care of and watch out for your financial health but you. Just as no one can lose the weight but you, no one can cause you to eat healthier but you, you are the only one to protect your future with your unique financial plan. If you let your financial plan go to chance, chance is what you will get.If you have been financially savvy for some time, it may be that you are able to do your own personal financial plan. However, even if you are savvy, it helps to use a professional certified financial planner to test your financial plan against your core values and what you are attempting to accomplish. After all, everyone tends to be at a different time in their life. For instance, the goals of a single parent with minor children will be substantially different from that of an entrepreneur. As we progress through life and one goal may be accomplished, there are other items that come into play as a goal, i.e. saving for retirement, taking care of ailing parents, saving for a vacation home, starting a new business, to name a few. A certified financial planner has software available that can predict what you might have to set aside to provide a certain income stream for you at retirement, or what amounts of money you might have to put aside for college for children.Even beyond the use of the financial software, it is helpful to use a professional to sort through what your core values are, what goals you may have (financial and otherwise) and to prioritize those goals. Sometimes that is difficult to do by yourself, as you may tend not to be objective about certain issues and it may then be good to talk with a financial planner to sort through all of your objectives.While we cannot predict the future, it is important to prepare a written plan each year that sets forth your goals, both financial and otherwise. Each year at the beginning of that year, you can do a review of what you have accomplished from that last year and what has to be changed from the last year’s plan, as life has a way of throwing “curve balls” at us, which requires that we change that financial plan. You will be in a better position to change direction if you need to, if you have already been executing against an existing plan.What’s your financial plan?