You contribute the max amount to your 401K, have set aside money for your child’s education, and are on track to finish paying off your mortgage within a few years. Everything in your financial plan seems to be going well, right? True. However, you might be missing out on some key aspects that could make a big difference in your personal and financial life.
In my years of experience as a certified financial planner, these are some areas of financial planning that are often missed and why you need to include them:
Are you happy? Are you achieving your personal goals? In some cases, money has the power to help our dreams come true. For example, if you’ve always dreamed of traveling to Asia, then why not make that a part of your financial planning? Or, perhaps you’ve always dreamed of owning a vacation property, learning to play an instrument, or even trying your hand at painting...but feel like it doesn’t fit in your budget.
Personal goals and dreams like these can be balanced with smart financial planning for the future. It’s hard to know what may be possible if you don’t discuss it or bring it to the table. As a certified financial planner, I approach these goals with creativity and an open mind. You’d be surprised what might be possible!
When talking about money, people typically talk about facts and figures. Yet, our feelings and emotions influence our money decisions very strongly. For example, if you experienced financial insecurity in the past, you might still feel anxious about spending money today. Or, you may have spending habits related to how making those purchases makes you feel. Emotions can also influence how people invest.
Why does this matter? By discussing your emotions and values with your certified financial planner or advisor, you can help them understand your state of mind, concerns, and how you’re making decisions. This can improve communication and also help them guide you toward smart financial decisions.
When people think of financial planning, they often think of investing, growing, home ownership, and similar growth-oriented goals. Yet, there are many other specialized needs that you might have. Whether you’re a woman, a part of a multigenerational family business, are going through a divorce, or are planning on retiring within the next few years, a planner with experience in your unique needs can provide specialized insight and advice.
Also, choose someone who not only has experience in the area you need help in, but is also passionate about helping others with real cases, education, and real-life personal experiences.
No one wants to experience a difficult medical diagnosis or go through a divorce. Unfortunately, life doesn’t always go exactly the way we plan for it to go. However, with smart financial planning, you can prepare for the unexpected.
A wise financial planner will help you plan for the unexpected. There are many tools that can help, such as insurance, emergency funds, and even investments. Planning for the unexpected also extends to your will and estate plan. Once your estate plan is in place, it’s very common to forget about it. However, like your yearly physical, it’s something you should revisit periodically. Changes in family structure, your assets, and liabilities, or even your job can affect your estate and succession plan.
Be sure to go over your plans with your lawyer and certified financial planner regularly. This can ensure that there are no misunderstandings or mistakes in your estate planning.
Now that you are aware of these four important elements of financial planning, it’s time to work on them! Which of these will you tackle first? Remember, working with a CFP® professional can help you face the future with confidence, no matter what it brings!
Elaine King is an experienced financial planner and CDFA® who has helped thousands of individuals and families achieve their unique financial goals. Contact her to set up an appointment today! For more tips, follow Elaine King on Facebook, YouTube, Instagram, and Twitter.
