Starting a Financial Plan

If you have ever heard the old adage, “Drop by drop makes a lake,” then it may have already occurred to you that small changes create big results over time.


Never is this more apparent than in the responsible choice you can make to focus energy on financial planning as early in life as possible. Even if you feel you have missed some useful chances to invest or grow your assets, it is never too late to engage a professional financial planning advisor to help you make the most of your monetary gains, or at least help educate you on how to get the most out of your money. Think of financial planning as a necessity, rather than a luxury. You are investing in your own wellbeing and the success, potential and comfort of your family.

Understanding Financial Planning

What is financial planning? Many otherwise thrifty Americans come to the notion of financial planning too late in life. This phenomenon is attributed to the fact that the general public does not fully understand what financial planning really is.

There are a number of ways you can go about creating a financial plan for yourself and your family. It is possible to do it with and without a hired financial planner, although the expertise and insight of someone trained in the industry are always beneficial. Look for someone with the official “CFP” (Certified Financial Planner) title, as this lets you know that they have passed rigorous testing in the field of money management and are typically held to high standards of continuing education to stay current in financial trends. Bonafide financial planning simply means laying out a budgetary template for the remainder of your life that you fulsomely commit to upholding. Financial planning involves strategizing on how much to save, where to save it, which risks to take and to avoid and how to live comfortably within your means.

Specific Financial Planning Considerations for Families

The type of financial concerns you will face in saving for your family and planning retirement will depend largely on the size of your family and personal factors. For instance, families with two incomes or two parents will usually have more financial or human resources than single-parent households. Blended families with stepchildren have different financial planning considerations than a traditional family setting. Same-sex marriages and unmarried partners living together while raising children also constitute different types of families with unique needs in the realm of financial planning.

Factoring in differences in income between you and your partner is an important step. Is someone the breadwinner and someone the homemaker? Are both spousal parties working and, if so, are they making even contributions to the family budget each month? All of these aspects of family financial life are weighed and optimized by your financial planning advisor.

If you are in a blended marriage, then you need to set out specific financial provisions for the children from each of your marriages in the event of your or your partner’s illness or death. Accommodating college funds, orthodontics, medical and savings for children of disparate ages can be challenging, as can balancing financial support (or lack thereof) from an ex. The various health and education needs of your children, your long-term retirement goals and even the spending habits you hope to instill in your children must all be considered in detail when constructing viable financial planning for any family.

How To Find The Perfect Financial Planning Advisor

There are several universal characteristics that you will want to look for before trusting a representative with the details and arrangement of your financial life. One of the most important details to look for when choosing a financial planning advisor is the word “fiduciary” in the description of his or her business practice and ethics. This word means that your advisor will have a legal obligation to look out for your best interests.

Financial advisors tend to specialize in any one of various areas of wealth management so it is important to map out your specific planning needs before seeking the proper agent. Some advisors focus on investments, others on estate planning and still others on providing asset management only for clients with large investments. Make your search for the perfect financial planner about matching your long-term financial goals to a person professionally specialized to steer them in the most lucrative direction for you.

Things to Discuss With Your Financial Planning Advisor

At first, it may seem uncomfortable and odd to hold forth on private money matters with your financial planner, who will be at the offset essentially a stranger. It is important to remember that full disclosure and honesty when presenting the facts of your financial life are essential to allowing your agent to do their best work. Be forthright and detailed about your short-term and long-term financial objectives with your advisor. It is his or her primary duty to devise a budgetary plan that works well within the parameters of your distinct need and comfort levels.

There are a number of things you should discuss with your financial advisor, such as your saving and spending habits, your retirement goals and life insurance. College funds and emergency savings are also crucial matters of interest. You will be required to be frank about your willingness to engage in financial risk within the stock market; some clients have a greater tolerance for this than others.

Financial Planning After A Divorce

There is no easy method for sorting out separate finances during the course of an emotional divorce. The key component to maintaining fairness, courtesy and sanity is to remember that divorce indicates a lifestyle change. Accepting that your standard of living may revert back to a smaller budget, house or car note are simply financial facts of life in divorce.

It is imperative to speak to your wealth management advisor about your divorce and to go over your bank and credit card statements for the preceding year so that you can accurately and legitimately estimate your individual spending habits, particular financial concerns, costs associated with the children and budgeting for alimony where necessary. Remember that budgetary items such as child support and taxes can raise, as your income does and may require a more frugal savings plan than seems immediately welcome.

Health insurance is another costly consideration that your financial planning advisor can help you to navigate. If you are accustomed to being on your spouse’s health care plan, then this will be a new and expensive addition to your monthly budget, as COBRA coverage never lasts more than 36 months. The main focus of your post-divorce financial planning, and indeed any financial planning at all, should center on setting up a feasible budget that allows for the smoothest transition into the best and most fiscally sound life for yourself and your family.

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