Building a financial plan is similar to solving a jigsaw puzzle.
There are several different pieces. Each one is a distinctive shape and size, but all are equally important in the overall solution. All of the pieces fit in a specific place and, when correctly positioned, reveal a complete picture.
In the case of your financial plan, a well-constructed, holistic strategy consists of these pieces:
- Tax Planning
- Retirement Planning
- Education Planning
- Insurance Planning
- Investment Planning
- Estate Planning
- Social Security & Medicare
Where a financial plan differs from a jigsaw puzzle is that the pieces are consistently changing in weight within the plan. Take investment planning as an example. Younger investors can often benefit greatly from accepting greater risk in their investments, potentially benefiting from greater returns. However, as we age our tolerance for investment risk lessens and stability is vital to our planning.
Additionally, outside factors to our planning change. Rules and regulations for markets and financial vehicles change constantly. Markets shift. Opportunities present themselves, sometimes for a limited time and others for a lengthier change.
This makes financial planning a dynamic environment rather than a static one. It simply isn’t enough to just stash away some money for a rainy day and our future.
Standing still and hoping for the best cannot achieve financial wellness.
But just what do we mean by “financial wellness?”
A state of financial wellness means you can meet your current and future financial obligations. This means you can feel more secure in your financial future, knowing that you have successfully planned for both the expected and potentially unexpected events of life.
Additionally, a state of financial wellness can help reduce increased stress associated with the preoccupation with finances. This means you can enjoy life more.
How do we plan for financial wellness in such a dynamic environment?
Financial planning is dynamic because life is dynamic.
We don’t stand still. Each of us is born, grows, and accomplishes. We get jobs or build businesses. Many of us get married and start families. There are dream vacations to plan, homes to purchase, and retirements to enjoy.
How can we possibly be prepared for it all?
The key is to consistently review the pieces, making sure that they are all up-to-date. This means we have not only made certain we have plans in place, but that we have also weighed our strategies against the changing circumstances of our lives. By doing this kind of review we can adapt and balance our planning.
Planning for your financial wellness doesn’t have to be difficult. You just need to plan honestly, seek expert advice/assistance, and make the changes necessary for you and your loved ones.
As Ben Franklin said, “An ounce of prevention is worth a pound of cure.”
Take the time to plan for your financial wellness now. You’ll find potential future storms just aren’t as bad as you’d feared, and you’re ready for them.
Assessing Your Financial Wellness
The new year provides a great opportunity to review your existing plans and evaluate where updates are needed. As you go through this guide, we encourage you to use the below scorecard to assess your ‘financial wellness.’
Michael P Green is a Certified Financial Planning Professional™ and Wealth Management Advisor with Apollon Wealth Management, an Independent Registered Investment Advisory Firm with offices in Charleston and Mt. Pleasant. He earned his B.A. from the University at Albany and M.B.A. from the Sage Graduate School, in Albany, NY. In addition to being a Certified Financial Planning Professional™ (CFP®); Michael also holds the Chartered Life Underwriter (CLU®), Chartered Financial Consultant (ChFC®), and Retirement Income Certified Professional (RICP®) designations.
Apollon Wealth Management, LLC (“Apollon Wealth”) provides advice and makes recommendations based on the specific needs and circumstances of each client. For clients with managed accounts, Apollon Wealth has discretionary authority over investment decisions. Investing involves risk and clients should carefully consider their own investment objectives and never rely on any single chart, graph, or marketing price to make decisions. The information contained herein is intended for information purposes only, is not a recommendation to buy or sell any security and should not be considered investment advice. Please contact your financial advisor with questions about your specific needs and circumstances.