The Benefits of Planning
Vacations should be fun and relaxing, so it’s important to carefully plan them in advance. Nobody wants
to go on a hard-earned vacation and be uncomfortable or disappointed because they didn’t plan well.
Financial planning is similar – nobody wants to fall short of their financial goals simply because they
failed to plan. However, according to a survey by MyBankTracker.com, over 50% of Americans spend
more time planning their vacations than they do planning their finances. Financial planning is an
important task for everyone, at all ages and all income levels. Whether you are a starving college
student, a newlywed starting your career or an empty-nester, you will want to have a financial plan to
ensure you are achieving your financial goals.
Here are the benefits of establishing a clear financial plan:
1. Define goals. Creating a financial plan requires you to write down your goals and create a path
to attaining those goals. This exercise will help you figure out whether goals are realistic or
whether they should be modified. You may also realize you need to save more or spend less in
order to achieve them.
2. Identify and avoid mistakes. Analyzing your income and expenses will give you a different
perspective and help you evaluate the necessity of expenses. For example, you may realize you
are paying high rates on credit card debt or paying for a monthly subscription service that you
aren’t really using. In seeing the big picture, you can choose to cancel unnecessary expenses
and put the savings toward paying off your debt.
3. Stay focused. Do you have dreams that seem too far-fetched? For example, have you ever
wanted to take a year off and travel around the world? How about retire early? Want to build a
dream home? Sometimes, achieving these dreams is not unrealistic, but they will require an
eagle-eye focus. By creating a financial plan, you can create that day-to-day focus in order to
make these lofty dreams a reality.
4. Be confident. When you create a financial plan, you will know exactly where your money is
going each month. You will also know that you are covering your expenses, saving for long-term
goals, and understanding exactly how much you have left over for those times when you would
like to splurge a little. Then, you can splurge with confidence!
5. Develop a healthy money attitude. It’s easy to get caught up in the “keeping up with the
Joneses” trap. By developing a financial plan, you develop a different attitude and different
priorities. Rather than needing that new car when yours is just a few years old, you take pride in
driving the wheels off it before getting a new one. One interesting finding of a survey by the
Certified Financial Planner (CFP) Board found that people with a financial plan are more likely to
say they are living comfortably than those without a plan. In fact, 50% of those with a plan
making between $50,000 and $99,999 say they live comfortably compared to only 46% of those
without a plan making $100,000+. Mindset is often underestimated, but it is an important
factor when it comes to financial peace of mind.
The best part of financial planning is that there are no disadvantages of coming up with a plan. Even if
the plan is not perfect and needs to be modified down the road, it will still help you get closer to
achieving your financial goals. Plus, financial planning doesn’t have to be a chore – you can get help
from an investment advisor to make it easier and less time-consuming. That way, you will have more
time to plan for the fun things, like that vacation to Tahiti.
Daniel Goodman is a local investment advisor at WT Wealth Management located at 809 W. Riordan
Road, Suite 206 in Flagstaff. You can contact Daniel for a no-cost consultation at 928-225-2474 or at
DGoodman@wtwealthmanagment.com. You are also invited to join him for his financial planning
workshop at 5:30pm November 19th at the NACET building 2225 N. Gemini Dr. Flagstaff, AZ 86001