What is financial planning and how does it relate to me?

Surprise! Everyone needs it and everyone uses it.

To me, every time someone makes a decision that involves money, they are using financial planning.  When you have to figure out how that big purchase will affect your money today AND tomorrow, you are using financial planning.

Now, not every decision requires an extensive analysis but still, every dollar used now is one less dollar to use later. So it’s only natural to put some thought into it…

The most basic definition of real financial planning is the process of growing ones’ assets and protecting them for whatever the future may hold.   

We will all have a “future.” We will all get older.   Most of us will eventually want to buy a house, have money in the bank, send our kids to college and stop working…

What that all actually looks like will depend on the decisions we make today with our money.   So I think it’s pretty important to see what it takes to make the future you want become a reality.

That process, simplified:

1. Define your goals and objectives
2. Understand your current situation
3. Evaluate if what you are doing today will accomplish everything you want tomorrow.
4. Make any changes needed.

Go to Financial Calculators. com and run some basic calculations to see how much you have to save.

If you have enough free cash:

1. Start filling up the appropriate buckets with money.

If you do not have enough free cash:

1. Go back to step 1 and redefine your goals                                     OR
2. Change your spending habits to create more free cash.

Once you decide to put things in motion, you should check in with your financial plan at least one time a year.  Make sure things are on track and make course corrections as necessary.

It’s not rocket science but it does take work.

If you don’t want to do the work alone…. we are here to help.  Don’t hesitate to contact us today.  

-Jared S. Friedman