As we’re only a couple of weeks into 2024, there’s still time to take on a New Years Resolution! While the usual resolutions to lose weight, read more, or start meditating are all great goals, there’s one resolution that can reduce stress, increase confidence, and empower you in 2024 and beyond. No, not TRT therapy. I’m talking about financial planning. Yes, I hear you; it’s not as cool as learning how to play electric guitar or finally taking a stab at climbing K2 but, before you dismiss it, read on to learn more about how the financial planning process can help you in some surprising and impactful ways!
- Financial Planning: Your Financial Home’s Spring Cleaning
Imagine a financial plan as the equivalent of spring cleaning for your financial home. As we work with clients to develop a financial plan, we’ll first need to gather important information such as account statements, insurance documents, and tax forms. This initial step serves as a catalyst for revisiting neglected aspects of your financial life, like dusting off an old 401(k) or uncovering just how much life insurance coverage you actually hold.
In the hustle and bustle of daily life, many of us have an incomplete picture of our financial standing which leads to underlying anxieties about the future. Organizing your finances through the financial planning process not only provides clarity but also lays the foundation for a more secure financial future.
- Goal Alignment: Managing Conflicting Priorities
A fundamental goal of financial planning is finding the delicate balance between your various life goals. Whether it’s short-term objectives like home repairs or a new car, or long-term aspirations like retirement and college expenses, a financial plan helps you navigate these conflicting priorities.
Financial planning can provide a roadmap to align short and long-term objectives. With a clear understanding of your goals and priorities, you can make informed decisions on how to best manage and allocate your resources. This helps ensure that progress towards one goal doesn’t jeopardize another. Whether it’s balancing the renovation of your home with saving for your child’s education, a financial plan can help give you a sense of control and direction.
- Emergency Preparedness: Safeguarding Your Financial Future
Life is unpredictable and financial planning can help you set up an appropriate safety net to help guard against unexpected events. By prioritizing emergency preparedness into your financial plan, you can safeguard your financial future against unforeseen circumstances such as medical emergencies, job loss, or other crises. Establishing an emergency fund and insurance coverage tailored to your specific needs (as opposed to only using a rule-of-thumb) not only shields you from potential setbacks but will also instill confidence in your ability to weather any storm that comes your way.
- Risk: This Time… It’s Personal
When we go through a financial plan, we end up with a much more personalized perspective on risk. When most people think about risk, they think about portfolio volatility. A financial plan encourages you to assess risk in the context of your unique goals. It’s not just about market swings; it’s about understanding how these fluctuations can impact your ability to achieve specific objectives. Depending on your specific goals, those market swings may be completely meaningless. By defining risk in a more personalized manner, financial planning helps you make informed decisions while also alleviating some of the stress that can come from short term market gyrations.
Making a New Year’s resolution to creating a financial plan is a commitment to a more secure, organized, and personally tailored financial future. It’s not just about the numbers; it’s about empowering yourself to achieve your goals with confidence and clarity. So, as you embark on this financial journey in 2024, talk to your advisor at Innova Wealth Partners and take a step towards the new and improved financial you!
INNOVA is a SEC registered investment adviser. Information presented is for educational purposes only intended for a broad audience. INNOVA is not giving tax, legal or accounting advice, consult a professional tax or legal representative if needed. The opinions expressed herein are those of the firm and are subject to change without notice. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Any opinions, projections, or forward-looking statements expressed herein are solely those of author, may differ from the views or opinions expressed by other areas of the firm, and are only for general informational purposes as of the date indicated. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.