What Is A Financial Plan?

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A financial plan is paramount to a family’s financial success. During periods of volatility we often hear that investors should “stay the course”, but what does that mean? Is there a course to stay without having a financial plan? We feel that there seems to be a misconception that having an investment game plan is synonymous with a financial plan, and it is not.

Financial planning, having a plan, is so much more than investments and should address areas such as retirement planning, estate planning, education planning, risk management, asset allocation review and cash flow planning. This is by no means an exhaustive list or one that everyone needs to use. The areas covered within the plan will differ from one to another depending on what is important to them and what they need to address. The plan will help you navigate financial events and evaluate how those events may impact your financial situation.

The plan is based upon your goals and dreams for the future, short and long term. These will most likely change over time as your personal situation changes. This means that putting a plan together today and not reviewing and updating it from time to time will do you no good. The plan is simply a snapshot of how things look for you at the point in time it is completed. This is why it is important to consistently update and review your progress towards your goals, are you on or off track.

We often see people who have embarked on the financial planning process at some point in their life but they never take the time to review and update their progress or find someone to help. This merely creates a stale plan that does not help you make decisions over time. Having a plan that is up to date and reflective of your current situation will allow you to evaluate financial decisions and see the impact, positive or negative, they will have on reaching your goals and dreams. This is what having a plan is all about.

Utilizing a financial plan that outlines your goals and dreams, tracks your progress and adjusts for changes in your life and circumstances is invaluable. This is the equivalent to having a GPS or Waze in your car. The plan will assist you in making decisions that without a plan they would be difficult to make or see the impact. The plan will also allow you to easily evaluate how short term, or longer-term volatility, will impact your ability to reach your dreams and goals. This is the true way to see if adjustments should or need to be considered for your portfolio. Assuming your risk tolerance, time horizon and other variables remain constant this will be the true test of the impact the volatility has had on your goals.

Planning is a roadmap for your financial future and it should provide a guide for how you invest. Keep in mind, investments are simply one component of the plan. It is time to prepare for the next time volatility enters the markets and put a plan in place to evaluate your ability to successfully reach your goals. Just contact us, Mitlin Financial, at (844) 4-MITLIN x112 to schedule a time to discuss this for you. Be sure to share this article with friends, family, and business acquaintances who might be interested too. We look forward to helping you, and them, get on the right path and stay there.

This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.

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