Being wealthy is not a criteria.
All too often I talk with young professionals who tell me they would love to do some financial planning once they payoff their debt or have some savings built up. Despite the common misconception, being debt free or wealthy is not a prerequisite for Financial Planning. Financial Planning is about making smart decisions with your money to reach your financial goals.
I admit I wasn’t always actively thinking about a financial plan for myself or my relationship. I was busy building my career, finding a mentor, learning more, as well as hanging out with friends, going on ski trips, running 5ks, and building a community. The list goes on! But looking back now, it is clear an element of financial planning was always there: What would my next job look like? I need to move, what type of apartment can I afford? What trips do I want to take next year?
Believe it or not, this is financial planning.
I’ll break it down for you. Even though I was not working with a financial planner at the time, I was reviewing my paystub, checking my bank account balances, and looking at my 401(k) statement each quarter. Still, nagging questions remained: Were retirement accounts growing and properly allocated? Was I making enough to both pay my bills and save for my retirement? Was I making a dent in my student loan and credit card debt? When will these high monthly payments finally end so I can finally do more with the money I’m earning? It was a slog, and the questions remained daunting until I spoke to a friend with some financial savviness. She helped me understand how complex and interrelated each question was to the other, and by understanding the connections I could better see and manage my broader financial picture. In short, I realized these things don’t sit in their own individual silo. My finances – assets, liabilities, taxes, benefits, spending plan – are integrated and can have an impact on each other.
This ah-ha moment was extremely exciting for me. It opened me up to so many possibilities. I learned how to use my money and resources to work smarter and harder for me. I was now looking at those paystubs, statements and bills together. I could save, shift my spending to lower my cost of debt, still do the things I wanted to do, and actually see an improvement in my overall net worth. I didn’t think it was possible, but after getting the financial advice and looking at everything together, it was making a huge difference. The future was clearer, and I was able to sleep better at night. Eventually I changed careers and started a financial planning practice. It was literally life changing!
The point is, financial planning is more than investing and saving for retirement. I truly believe everyone can develop the skills necessary to manage their finances on their own, but sometimes we need some help getting started, like the help I received from my financially savvy friend. On the other hand you might decide you want a longer term partner help tackle financial difficulties of life’s challenges. Most of us are just busy living our lives and doing the things that make us happy. I’d like to help you live the life you want to live and reach your personal financial goals, whatever they might be.