Using Financial Planning Services Effectively

Financial planning gives you a road map to reach your most important goals. People with a financial plan are more than twice as likely to be living comfortably compared to people with the same income who don’t have a plan, according to a survey from the CFP Board.

So how can you get the most out of this important process? If you’re new to financial planning services or want a refresher, we’ve covered some tips for getting more out of this valuable relationship.

Start Early

You should meet with a financial advisor as soon as you can. Don’t assume you earn too little or you’re too young to need a plan. Even saving a little money now can make a big difference for your goals and an advisor can also point out some simple mistakes you might be making with your finances, like not having a big enough emergency fund.
Advisors are interested in meeting with you even if you are just beginning your career. They know if they put in the work now, the two of you can build a lifelong relationship.

Set Specific Goals

One big reason people don’t reach their financial goals is because they really don’t set any. They have some vague ideas of where they want to go in the future but without a clear plan, they never make any progress towards it. Financial goals are better when they are specific, such as, “I want $1 million for retirement when I turn 60”. A financial advisor can be a big help in setting goals because they can tell you what’s realistic and what amount you’d need to save every year to reach your goals.

Discuss Goals With Your Spouse

If you’re married, your financial plan needs to be a team effort. Otherwise, you can end up working against each other. For example, one person wants to save as much as possible to retire early, while the other is happy working longer if it means spending more now. When couples are not on the same page, it can lead to major arguments and ineffective strategies. It’s no wonder that money is a top reason why couples fight.

Your financial advisor should be able to broker this discussion so you and your spouse can figure out where you want to go in the future and also whether you need to compromise on some goals.

Set Intermediate and Long-Term Goals

Financial planning can seem like it’s only focused on long-term goals that are decades away, such as retirement. While the more distant future is definitely an important part of financial planning services, it’s not the only part. Intermediate goals should also be part of your plan, like saving up $50,000 in 5 years for a down payment on a house. In addition, you can track your progress for long-term goals. This way you have an idea whether you are on track or need to adjust.

Review Your Finances Regularly

A financial plan will only be effective if you review it and put it in practice. Every month, you and your spouse should talk about your finances and budget. This way you can catch problems early, before they get too costly, like spending too much on your credit cards. You should also consult with your financial advisor every year or two to go over your entire plan. An annual review measures your progress and updates your plan for major life changes.

Financial planning can significantly help you reach your goals, but only if you use the service effectively. By working hard with your spouse and following these tips, you’ll be in a good position to reach your goals. Contact Nicholas Wealth Management to begin your financial planning today.

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