This article was originally published on March 4, 2022 in Albuquerque Business First
Key insights
- A financial plan is a clear and comprehensive document that analyzes and evaluates your assets, utilizing sound strategies to help minimize risk while providing you with better long-term odds of financial success.
- Consider all aspects of your financial life and follow five key steps when developing your plan.
- Your financial advisor can work with you to prioritize and define your objectives, establish a timeline, and help categorize your goals into needs, wants, and wishes.
- Track your financial progress and adjust your goals as your priorities change.
Realize the future you imagine.
When is the last time you took inventory over your personal finances? What are your financial strengths and weaknesses? No matter where you are in your life, a thoughtful review of your financial picture can better position you for financial wellness and tackling life’s challenges.
The good news is that taking inventory of your finances does not need to be difficult. Though it can be easy for individuals to push their finances down the list of priorities, financially savvy investors know that preparation is important: having a financial plan, being in tune with your finances, and addressing shortfalls all matter.
Start by identifying the building blocks: income, savings, investments, insurance, and liabilities. A financial advisor can help keep you on track, identify strengths and weaknesses on your financial scorecard, and implement strategies toward your financial wellbeing. You have a specific definition of success, and therefore your financial plan should be created around your personalized goals.
A financial plan is a path to where you want to be
If you have not yet started a financial plan, work with a financial planner to take full inventory of your assets and develop a road map for attaining your goals. A financial plan should be a clear and comprehensive document that analyzes and evaluates your assets, and utilizes sound strategies to minimize risk while providing you with better long-term odds of financial success. A financial plan is a living breathing document, so monitor it annually and adjust as needed.
A truly holistic planning approach considers all aspects of your financial life ― including investments, budgeting, education planning, risk management, tax planning, estate planning, and retirement planning. Follow these key steps when developing your plan:
- Identify and prioritize your goals
- Analyze and evaluate your assets
- Strategize and develop a plan
- Activate and implement your plan
- Monitor and adjust your plan
Dreams and flexibility can work well together
Perhaps you dream of jetting off to the south of France, paying off your existing mortgage, or purchasing the luxury car you have had your heart set on for years. Your financial advisor can work with you to prioritize and define your objectives, establish a timeline, and help categorize your goals into needs, wants, and wishes.
Sticking to an agreed-upon strategy is not always easy ― it takes discipline, dedication, and likely a little sacrifice along the way. Remember there is more than one way to reach your goals. Consider additional scenarios where one or two variables are changed (e.g., retirement date, savings amount, asset allocation, etc.). You may be willing to retire later if you could achieve savings for a home remodeling project or your child’s education.
It’s a process, not a one-time event
As life priorities change, it’s important to track your progress and adjust your goals. Financial planning isn’t a one-time event ― new opportunities, unanticipated circumstances, and volatile markets may prompt changes at any point. Review your plan at least annually, or when something significant happens in your life.
Having a clear understanding of your goals and values can make it easier to focus on the things that matter most to you. Take time to review your finances. If you’re not where you want to be, work with a financial planner to develop a personalized financial plan. Think big, take action, and get inspired.
How we can help
A successful financial journey begins with a road map that addresses the needs and aspirations you have for yourself, your family, and your business. Whether you need help navigating current and long-term tax implications or simply need an advisor to help you focus and prioritize, our wealth advisory professionals are here for you.