By Kim Segal, CFP®
Most (if not all) of us have dreams and goals. It might be owning a vacation home or helping your kids out with college. Maybe it’s investing in a hobby or having the time to spend with grandchildren. The dreams aren’t usually the problem; the impasse happens because people often don’t know how to transform their dreams into reality.
This is where financial planning comes in. Let’s look at some of the benefits of financial planning and a sample financial plan to give you a visual of how the process works.
A Financial Plan Is A Road Map For The Journey
Having a financial plan is like having a map for your finances. If you have gotten off track from your goals or financial destination, having a plan to refer back to is essential to getting back on course. If misplaced priorities are starting to siphon dollars from your budget, having a plan can remind you of what you are willing to make sacrifices for and keep you accountable.
In a way, writing your financial plan is like making a contract for yourself, and making a sure reminder instead of an empty promise.
A Financial Plan Covers Your Bases
Financial plans often address a myriad of concerns and goals, from college planning to retirement income strategizing. Depending on your needs, your plan may narrow in on one element or address multiple goals you’d like to achieve over time. We believe a good financial plan should give you a detailed, complete view of your current financial situation, a thorough modeling of where you want to be, and the actions you need to take to reach those goals. It should address all the pieces of your financial puzzle, from stresses and fears to your values and dreams, and include risk factors, cash flow, retirement, estate planning, taxes, education, and income strategies to help bring you clarity and guidance. It is through our planning process that we can help you prepare for life’s expected and unexpected circumstances.
Your plan also serves as an objective sounding board; because it is customized to your life and lays out the steps you need to take to reach your desired future, it tells you what you need to hear, even if you don’t want to hear it. It shows you if you have financial blind spots or are making decisions that might make you feel good now but aren’t beneficial to your future.
A Financial Plan Is Built On Your Life
Your life is unlike anyone else’s. Using a one-size-fits-all template isn’t going to feel valuable or keep you on track when the rubber meets the road. Designing a personalized financial plan takes into account your dreams, goals, concerns, and life circumstances. Maybe you have some obstacles that prevent you from saving as much as you’d like to. Your plan will take that into account and help you find solutions. Maybe you have deeply held values about giving back to the community. Your financial plan will then include charitable goals and tax planning to maximize your generosity. Having a customized guide will empower you to take the daily actions necessary to reach the life you dream about.
It’s also important to remember that a financial plan is not a one-and-done deal. A solid plan grows with you and adapts as you reach milestones and face major life changes that not only change your circumstances, but also your priorities, such as marriage, the birth of a child, or a career change.
Let’s Take A Closer Look
The following sample plan looks at a fictional client’s lifestyle income plan and how we developed it, including identifying their goals, creating a balance sheet, reviewing their cash flow, and more.
Keep in mind that this is only a hypothetical plan presented to illustrate what a client’s plan may resemble should they work with me. The characters and circumstances are completely fictional and are for illustrative purposes only. Be sure to seek the advice of a qualified professional for your particular situation and not rely upon any of the information herein to make personal financial decisions.
We provide an overview of your current situation. With just one glance, you can see a big picture of your financial life, including income and expenses, assets broken down into specific categories, short-term and long-term liabilities, and cash flow assumptions.
With all that information in hand, your plan will go on to analyze every piece of your financial puzzle, showing detailed projections for income, expenses, assets, and mapping your progress toward your goals. This will show you where you will stand in retirement and give you something to aim for as you draw closer to your retirement years.
Get Started On Your Plan!
If you want to see even more features of our financial plans, download our full sample plan here. Once you’ve taken a look, reach out to us at Catalyst Investment Management today to schedule a no-obligation consultation, and together, let’s find out if we’re the right people for you to depend on during your journey to a comfortable retirement. You can schedule a call by reaching out to us at (617) 610-0587 or emailing firstname.lastname@example.org.
Kim Segal is co-owner and CERTIFIED FINANCIAL PLANNER™ (CFP®) at Catalyst Investment Management, an independent firm dedicated to providing personalized financial advice and planning. With over 20 years of experience, Kim is passionate about developing long-term relationships with her clients so she can provide them with customized solutions that make the most impact on their lives. Kim specializes in serving business owners and pre-retirees and post-retirees who desire a road map to their ideal retirement and women who are recently divorced or in the process of getting a divorce. Every client of Kim’s receives her utmost dedication and attention as they work toward their goals. She graduated from Boston University with a bachelor’s degree in business administration and spent much of her career prior to CIM at Charles Schwab, where she held various roles, including financial planner, vice president, and financial consultant. Outside of work, Kim loves spending time with her two teenage children, cooking, and staying active by running and skiing. Learn more about Kim by connecting with her on LinkedIn.