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Why is Financial Planning Important?

Before I explain why financial planning is important, it is necessary for you to understand what financial planning really is. Financial planning is an organized way to maximize your money and income with the help of financial tools. We live in a physical world were money is an important part of life and having a financial plan can help secure your future.

In other words, financial planning is a strategic way for you to attain your goals and dreams.

Do I Really Need a Financial Planner?

As a financial planner I hear this question often. I understand that your money issues are personal. It’s smart to have concerns and questions before allowing someone to advise you on your future. Almost weekly we hear about crimes in the financial industry that involve other people’s money. No one wants to be taken advantage of or be a victim in a scheme. However, shutting yourself off to professional financial advice can be just as costly.

My advice to everyone is to pick a financial consultant that you trust. Take the time to research your financial consultant. Use the same criteria to pick your financial planner that you would use to pick your doctor. The importance of your financial future is only second to your health.

There is no guarantee that a financial planning partner will make you money. However, working with an experienced financial professional has many benefits. They may provide you with the insight and knowledge to help you make educated decisions. The knowledge you gain through your financial advisor could help you make smart choices that deliver positive results.

If you decide to take the “Do-It-Yourself” approach to financial planning, then you may never realize the benefits you are missing out on. Some of my favorite clients are “Do-It-Yourselfers”. Learning about the financial planning process and discussing it with your advisor is a win-win situation. Even the best backyard mechanic calls up a professional mechanic from time to time.

What Are The Benefits of Financial Planning?

When most people hear the word “financial planning” they typically think of investing. However financial planning is about a lot more than just investing. A good and experienced financial planner will help guide you in many critical decisions.

For example: Do you purchase insurance to protect your family and property? Do you know what all that “stuff” means when you open up your policy and really look at it? Do you have enough coverage or too much coverage? You should know the answers to these questions. After all you are paying for it! An experienced financial advisor will help you sort out all of the confusing details so you have the best policy for your needs at the lowest cost.

Do you know that often times you can buy the insurance products you need cheaper through a financial planner? Do you trust buying your insurance through a TV or radio commercial? Is the sales person at the toll-free number advising you correctly about the policy they are selling?

Insurance and Finances….it can get complicated

In most cases, people have a finite amount of money to deal with. Your financial future depends on your ability to provide protection while growing your money.

To do this, you need insurance coverage that is affordable. Your insurance coverage must protect the things that you cannot protect yourself. How do you know for certain that you are not underinsured or over insured? If you can’t answer this question then you need a professional that will work in your best interest.

Growing your money is all about getting a return on your investments. This simple concept can be overwhelming and confusing for many. Your financial professional should be able to develop a comprehensive financial plan that is customized specifically for you.

The Components of your individual financial plan should address:

    • How much risk are you willing to accept to get the return you would like to receive?
    • How much of your principal are you willing to lose in the event that you go to a market type investment?
    • How much of your principal are you willing to risk?
    • Should you consider safe investments?
    • What percentage of mix between market type and safe investments should you have in your money pot?
    • When will you need this money you have saved and invested?
    •        a. Do you need it to fund college education?
             b. Do you need it for retirement?

If decide to plan your money strategies yourself, then I advise that you take the time to review all of the ways you make, save, invest, and spend your money. These four factors have a significant effect on your present and future situation.

Ask yourself these basic financial planning questions:

    • Am I providing my family the proper protection at the absolute lowest cost?
    • Am I making investments that are too risky or not risky enough to provide a return?
    • Am I able to keep up with economic changes and position myself to maximize my money?


Your financial plan should answer these questions whether you “do-it-yourself” or have a financial professional.

No matter what stage of life you are in it is never too early or too late to get started. The most important thing is to take the first step. Let’s get started!