OK, as a Certified Financial Planner® professional, I will say it: Happy World Financial Planning Day!
The Financial Standards Planning Board (opens in new tab)* promotes the day (designated as Oct. 3) 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 (opens in new tab) 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.”
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
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.
I 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, my advice to you following this World Financial Planning Day (opens in new tab)? Just one thing: Reach out to a Certified Financial Planner® (opens in new tab) 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 me, 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.
On a personal note, I wholeheartedly believe that I am truly fortunate to have found my calling. If I had not discovered this career, I don’t know if my family and community would have enjoyed the freedom and richness of life that a financial plan can offer.
Here are some questions to ask yourself today:
- When do I want to be able to stop working if I want to?
- 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 I always say, don’t measure your self-worth by your net worth. EVERYONE deserves a Financial Plan.
*The Financial Standards Planning Board, Ltd. (FSPB) is the organization that oversees the accreditation for Certified Financial Planner professionals and the “CFP®” distinction that many people in my industry (including yours truly) has at the end of their name.
This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
-
-
Stock Market Today: Stock Market Struggles While Alibaba Shines
Tech and communication services stocks were two of the worst performers today as Treasury yields rose.
-
Study Reveals the Most Trusted Banks
A recent study reveals the top 15 most trusted banks, with one bank ranking as the most trusted for the third consecutive year.
-
Protect Your Retirement: Seven Things You Can Do Right Now
Whether you’re preparing to retire or already retired, a proactive plan is critical to help safeguard your retirement, especially amid uncertainty.
-
Is Retirement in 2023 Still Possible?
Yes, it is, if you have a customized plan specific to your retirement. If you do, you’re in the minority, though, so here are some ways to develop that plan.
-
I Wish I May, I Wish I Might: Estate Planning’s Gentle Nudge
Contrary to what you might expect, using precatory language such as ‘I wish’ or ‘I hope’ can play an important part in three estate planning objectives.
-
Investors Nearing Retirement Show Patience With Markets
Despite last year’s upheaval, many investors are sticking with long-term plans and tightening their budgets instead of moving money out of stocks and bonds.
-
Long-Term Care Planning vs. Taxes: Finding a Healthy Balance
Many families discover that trying to mitigate the cost of long-term care can conflict with another common retirement concern — reducing taxes for retirees and their heirs.
-
For a Concentrated Stock Position, Ask Your Adviser This
There can be advantages to having a lot of stock in one company, but ‘de-risking’ can help avoid some significant disadvantages.
-
Long-Term Care Insurance Quandary: Keep Paying or Let It Go?
As long-term care insurance premiums go up, many policyholders are struggling with what to do. Accept higher premiums, reduce benefits, let the policy lapse or take a payout?
-
In Retirement, Many Crucial Questions Start With the Word ‘When’
For a secure retirement, make sure you know the answers to all of these “when” questions.
