The financial devastation of the coronavirus is evident, but here in Texas we have the double whammy of the coronavirus AND very low oil prices. Most troubling, the length and severity of this one-two punch is unknown. For many people, their personal financial situation has taken a hit and the steps to get back on track are not clear. Now, more than ever, we recommend you take the time to create and implement a long-term financial plan.
People instinctively know the absence of a plan can lead to subpar results. Most of us would not consider undertaking major projects like a family vacation or building a home without a plan. Plans do not leave the outcome to chance. Instead, a plan provides the steps forward so you can progress effectively and with confidence. With a plan, you know the end game. That way, if you veer off course, you can adjust and get back on track. A successful outcome is more likely with a plan.
Research Confirms a Plan is Helpful
Despite this knowledge, many people never get around to creating a financial plan to protect and grow their family’s wealth. That is a shame because the benefits of planning also apply here. Implementing a comprehensive, actionable financial plan can significantly improve your financial outcomes. Just as importantly, a plan can instill security, confidence, and financial peace of mind. With your finances in tip-top shape, you can be confident about where you are headed and how you will get there.
If you are not entirely satisfied with the current management of your finances, a financial plan may be the solution. Research from the Certified Board of Financial Planners Board of Planners shows that people with a financial plan are three times more likely to be satisfied with their personal finances, and two times more likely to be living comfortably. What’s more, long-term financial goal-setting is also correlated with greater satisfaction with personal finances, according to a 2016 study of Financial Capability in the U.S. by FINRA’s Investor Education Foundation.
Specific Benefits of a Well-Designed Financial Plan
A plan will identify opportunities for improvement such as reduced taxes, improved investment results and cost-effective insurance. With all your financial parts organized in one place, control over your wealth will improve. You will save time because a robust plan succinctly outlines improvement recommendations complete with accountabilities and due dates. A plan promotes better financial decision-making because it provides a baseline against which decisions can be made. Most importantly, a plan will turn a fuzzy view of your financial future into crystal clear goals with incremental steps to achieve them, complete with periodic progress check-ins and course corrections, as needed.
Where to Find Help
How can you get help preparing a financial plan? Several solutions are available online. If you want professional guidance, a good starting point is our Insiders Definitive Guide to Finding your Ideal Wealth Manager.