Market Watch – Make Financial Planning Work for You

We all realize that financial planning is important. Done correctly, a good financial plan can provide direction and meaning to your financial decisions. While I am sure most of you are familiar with the term “financial planning,” I thought I might take some time to flush out what it really is all about and provide some guidelines on how you can make the financial planning process work best for your situation. Regardless of whether you plan to do it yourself or use professional advice, this is information all consumers should be familiar with.

Put simply, financial planning is the process of meeting your life goals through proper management of your finances. Some of the more common life goals would include buying a home, paying for a child’s education or planning for retirement. As a CFP® professional, I follow a financial planning process of six steps as described by the CFP Board. These six steps allow you to asses where you are now financially and what you may need to do in the future to reach your goals. They include:

1. Establishing and defining the client-planner relationship.
2. Gathering client data, including goals.
3. Analyzing and evaluating your financial status.
4. Developing and presenting financial planning recommendations and/or alternatives.
5. Implementing the financial planning recommendations.
6. Monitoring the financial planning recommendations.

Always remember that you are the focus of the planning process. Therefore, the results you get from working with a financial planner or doing it yourself are largely dependent on your approach and commitment to the process. With that in mind here are some tips for getting the most out of the financial planning process:

1. Set measurable financial goals. Be specific. Be realistic.
2. Understand the effect your financial decisions have on other financial issues.
3. Re-evaluate your financial situation periodically.
4. Start planning as soon as you can and start with what you’ve got. Financial planning is not just for the wealthy.
5. Look at the big picture – financial planning is more than just retirement or tax planning.
6. Don’t confuse financial planning with investing.
7. Don’t expect unrealistic returns on investments.
8. Be patient – you cannot change your situation overnight. Financial planning is a life long process.

There are many great resources available on financial planning, including some very informative free publications available from the FPA and the CFP Board. PPlease call or email me for a free copy or go online at fpanet.org or CFP.net/learn

Damien helps individuals invest and manage risk. He is a CERTIFIED FINANCIAL PLANNER™ professional and a principal of Walnut Creek Wealth Management.These are the views of Damien Couture, CFP® and should not be construed as investment advice. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Your comments are welcome. Damien can be reached at 925-280-1800 x101 or Damien@WalnutCreekWealth.com