Money Matters

What is a Financial Plan, and Why Should You Build One?

We’ve all thought about what we want to achieve in life, but applying strategy and discipline to reach those goals can be challenging to do without a clear action plan. If you’re new to financial planning or are considering working with a professional advisor, you’ve likely heard how important it is to have a financial plan as a starting point. So what does it really mean to have one? A proper financial plan goes beyond tracking expenses or briefly reviewing your investments. While these are critical planning steps, a financial plan is a more comprehensive approach that significantly affects your life. 

What is a Financial Plan?

A financial plan lays the groundwork and looks at your bigger financial picture to identify a path that will allow you to achieve specific goals. For example, your goals may be to buy a home in San Diego, grow your family, fund your children’s college, start a business, retire, or something else. Since we all have different objectives, a good plan should be customized to your life and concerns. 

Building a financial plan is like setting a destination in your GPS. It maps out the route to your objectives in the most efficient way and offers alternatives along the way if you get off track. It is your financial reference to know if you’re headed in the right direction, and if not, what adjustments you may need to make. It can also help couples and families stay on the same page about their finances and avoid common money mistakes that often come without a defined plan.

How Do You Build a Financial Plan?

When thinking about your finances and balancing your lifestyle today with your future goals, there is much to consider. While there is quite a bit that goes into creating a financial plan, developing your personal roadmap requires diving deep into various areas of your life to help answer questions such as:

  • Are there strategies to lower my tax bill either now or in the future? 
  • Am I appropriately invested, or do I need to adjust my allocations to achieve my goals? 
  • How much life insurance do I really need? 
  • What should I do with my company stock options? 
  • Do I have an estate plan designed to reflect my wishes? 
  • Am I saving enough for retirement, and am I leveraging the right types of retirement accounts? 
  • What else should I be doing with my money, and what changes do I need to make? 

When you delve into these questions, the conversation may feel a little overwhelming or bring up a range of emotions; however, they are just the start. A benefit of working with a financial planner is they can guide you through this type of examination process personalized to your situation and offer new insight, recommendations, and tools down the road if and when your lifestyle or goals change.

It’s Never Too Early to Create Your Financial Plan

The choices you make today have ramifications later in life, so being able to make educated, informed decisions now can be highly beneficial in the long run. A financial plan can mean the difference between achieving your goals or feeling disappointed as they pass you by, so it’s never too early to begin creating one. 

Do you want to learn more about how we can help you and your family build a financial plan? Contact our team; we’d love to hear more about your goals and how we can help you reach them.

CCMI provides personalized fee-only financial planning and investment management services to business owners, professionals, individuals and families in San Diego and throughout the country. CCMI has a team of CERTIFIED FINANCIAL PLANNERTM professionals who act as fiduciaries, which means our clients’ interests always come first.
How can we help you?

Matt Showley is a CERTIFIED FINANCIAL PLANNER™ professional and Accredited Estate Planner®️ who advises individuals, families, and business owners on portfolio management, financial planning, tax and estate planning, real estate, cash-flow modeling, and education planning. In addition to his role as principal and owner, Matt continues to oversee the firm’s operations and work with new and existing clients. Matt joined CCMI in 2006 and has contributed significantly to the firm’s wealth management and financial planning processes and client relationships.

More by this Author
Below are additional articles written by this author.

As you embrace retirement, crafting an estate plan is pivotal to protect your legacy, assets, and loved ones’ futures. An estate plan is essential to…

If retirement is on the horizon within five years, now is the time to revisit your retirement plan and ensure you’re on track. This period…

When considering changing financial advisors, several factors come into play. You may know someone contemplating this transition, whether prompted by a firm acquisition, shifts in…