Why a Financial Plan Matters

Many people have financial goals, such as saving for retirement, buying a house, or paying off debt. But how do you know if you are on track to achieve them? How do you balance your current needs and wants with your future aspirations? How do you deal with unexpected events that may affect your finances? Don’t let the endless questions overwhelm you, a financial plan may help navigate the uncertainty.

A common misconception is that financial plans are only for the wealthy or the retired, but the truth is, everyone can benefit from having a financial plan. A financial plan is a comprehensive document that outlines your financial situation, short- and long-term goals, along with strategies and actions to pursue them. A plan is created based on your personal values, preferences, and risk tolerance, and takes into consideration your income, expenses, assets, liabilities, taxes, insurance, and investments. Think of it as your financial roadmap to the life you want.

Among the many benefits, a financial plan can help you:

• Set realistic and measurable objectives
• Create a budget and track your spending
• Manage your debt and improve your credit score
• Build an emergency fund and protect yourself from unexpected events
• Minimize your taxes and optimize your cash flow
• Plan for retirement and other life goals

However, creating and implementing a financial plan is not an easy task. It requires a lot of knowledge, skills, and tools to analyze your financial data, identify your needs and preferences, and design a customized plan that suits your unique situation. Moreover, a financial plan is not a static document that you can set and forget. It needs to be reviewed and updated regularly to reflect changes in your circumstances, goals, and market conditions.

Fortunately, creating a financial plan is not something that has to be done on your own. You can seek professional guidance from a qualified financial planner to create a customized plan that suits your needs and preferences. A financial planner can provide ongoing support and advice to help you avoid common pitfalls, such as emotional biases, lack of diversification, or inadequate insurance coverage. In fact, a 2021 study by Smart Asset stated that people who work with a financial advisor have higher net worth, higher savings rates, higher retirement income, and lower debt than those who do not. The study also found that working with a financial advisor can increase happiness, reduce stress, and enhance quality of life.

A financial plan is not a luxury, but a roadmap customized to each situation. It can help you plan for your dreams while enjoying the present. The sooner you start, the more time you have to pursue your goals and enjoy the benefits of a financial plan. And working with a financial planning professional can make the process easier and more effective. At Alera Group, we are committed to helping you pursue your financial goals by offering comprehensive financial planning services that cover all aspects of your financial life. We work with you to understand your situation, listen to your concerns, and provide unbiased advice. Using state-of-the-art technology and tools, we create and manage your plan. If you’re ready for your complimentary consultation, contact an Alera Group advisor today.