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The Financial Planning Process and Why You Need a Financial Planner Now

According to a CNBC and Acorns Invest in You Savings Survey 75% of American are winging it when it comes to their financial future. That’s 3 out of 4 people. So that means more than likely you or someone you know is basically figuring it out as they go financially. Needless to say, but I’ll say it anyway, that’s definitely not an ideal approach to your financial well-being. The article supporting the survey released early April 2019 by CNBC highlighted the irony between this statistical reality and another that noted most American workers are living paycheck to paycheck and that not even half of all adults have the liquid resources to cover an unexpected expense of $1k. To decline financial planning assistance, let alone not even seek it out, in spite of this reality is stunning.

Don’t get me wrong, even as a financial planner, I’ve made some pretty boneheaded financial mistakes myself. Including dismissing the need for sound financial advice and a strong system of accountability that reinforced my financial goals while taking into consideration my current financial situation. But I’ve learned, as many of us do over time, the benefits of having this type of financial infrastructure in place. To not, is to essentially throw money away or to leave opportunities to make money on the table.

I suggest everyone consider hiring a fee only financial planner who acts as an independent, objective third party with the sole interest of helping you improve your financial situation. Simply, a financial planner’s job is to help you make sense of your financial situation by helping you better understand where you are versus where you need to be relative to your financial goals and to help you put a plan in place that leads to their achievement.

From the perspective of the financial planner the financial planning process has six steps according to the CFP Board:

  1. Establish client/planner relationship
  2. Gather client data
  3. Analyze and evaluate client’s financial status 
  4. Develop and present a financial plan
  5. Implement financial plan
  6. Monitor financial plan 

Louis Brandeis said, “Sunlight is said to be the best disinfectant.” Going through this process with a financial planner can be very illuminating. It can provide more clarity around your financial decisions, behaviors and their impact on our financial situation. In my experience steps two and three are the core of the planning process because we cannot know where to go until we know where we want to be, and we cannot get where we want to be without knowing how to get there. So, gathering data, setting goals and becoming clear eyed regarding our financial status better equips us to carve out a path of progress leading to our financial goals.

Lastly, the survey also found that those who earn more are more likely to consult a financial planner. Those making less are found to be giving less consideration to their financial future. Please, let’s dispel ourselves of the myth that you have to have an abundance of money to consult a planner. You do not. You just have to prioritize your financial well-being and make the investment necessary so that you can have the conversations needed and undergo the process necessary to better position yourself to accumulate more resources going forward.

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