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Get Your Financial Plan Organized

August 09, 2021

Many of you reading this may be having to take care of elderly parents who have not properly planned their finances and it has got to be one of the most stressful things you’ve taken on.  This could also motivate you to not be the same case for your children. Being financially destitute in your later years is not something you want to leave for your family to deal with. Getting your financial house in order now is the best way to help make sure you’re living the retirement you deserve while also doing something that your family will definitely appreciate later on.

So what are some areas that should be addressed with a proper financial plan that will indirectly support your journey towards financial security and prosperity in later years?

  • Have you protected the two most valuable assets you have?  Your health and your ability to earn an income.  Although the cost of health insurance can be expensive, the cost of not having it can absolutely bury you. How about protecting your future income?  What if you were to experience cancer or a long-term disability, how would you fund your future lifestyle?  Many people insure their cars,  their homes, and their boats, but fail to insure the source of all of these things, their income.  Long-term disability insurance is something that each client should examine as part of a comprehensive planning process.  
  • Your life.  Having a human life value calculation performed by an experienced Advisor is a great way to ensure that your family would be provided for today, but also your future goals such as helping your kids buy their first homes, or helping your grandchildren with their education expenses.  I call it sealing your legacy.  I myself, have 3 young children, and proudly walk around knowing that my legacy is sealed.  Whether I am blessed to be here or not, Brooklyn, Easton, and Taylor will go to the college of their choice because their Dad has taken the time to plan and secure this future. 
  • Your mortgage. Home equity has been one of the least expensive ways to access money for many years now.  Low interest rates  do not appear to be going away anytime soon.  Do you have a strategy to pay your mortgage off significantly sooner than the 30 year mortgage you likely secured?  There are strategies for doing just that which don’t involve simply paying extra on your mortgage each month. 
  • Your 401(k) or equivalent retirement plan.  Are you putting in enough to fully take advantage of your company's match?  
  • Your credit score, your debt burden.  Having a pristine credit score should be something you aspire to, or something that you guard carefully if you already have it.  We are in one of the lowest interest rate environments we have ever experienced.  Debt, properly managed, can be a phenomenal tool.  With that being said, putting yourself in a position to ultimately be debt free is always a sound plan, and may provide for additional cash flow in the future.
  • Your savings habit.  What if you haven’t saved enough to this point, or maybe saved anything?  What do you do?  One technique I help parents implement a few years before college time is to save like they have never saved before.  You might think this technique is about the actual money that is saved.  That can certainly be useful, but the reality is that you can only make so much of a dent with so little time.  Saving like you have never saved before is actually about creating the habit and redirecting those future savings.  Many of my clients redirect their cash flow from savings to college tuition bills while their children are in college.  The greater you do at learning to “live without” that money leading up to college, the more you can direct toward the funding of your children's college as you go.  
  • Your earning potential.  I say to my clients and financial advisors all the time that you think we are in the business of financial planning, investments and insurance, which is true, but equally true is this idea that we are in the business of personal development.  I actively work with my clients to challenge, encourage, and teach in the area of personal development.  Whether that involves more education, going into business for themselves, or taking on a new job, earning more money makes providing for your kids or grandkids’ education much more attainable.  

I just gave you a sampling of things to consider when getting your own financial house in order.  The reality is everyone's financial situation is different and the planning process we take our clients through is comprehensive, and a living and breathing thing.  The best plans don’t sit on a shelf somewhere and get dusty.  In my opinion the best plans inspire action and have the flexibility to evolve and change as your life and external conditions change.