What is Financial Planning and Why Would I Need Ongoing Planning?

I was watching my daughter’s game one evening and the dad of another player was proudly spouting his knowledge and achievements buying cryptocurrency as an investment. He grabbed the attention of a few other parents who were watching their kiddos too. Although, I am optimistic they were just humoring his sales pitch. This was at the recent height when everyone who happened to own it was suddenly a genius and touting how foolish the rest of us were for not throwing all our metaphorical eggs into this next-big-thing basket.

Today it is easy to Google a question, follow an influencer for the latest tips on the market, or listen to a friend’s advice on what worked for them. These options may help with simple questions, yet the reality is that many of our ever-changing and transitioning life circumstances warrant a more personalized approach and ongoing financial planning. And taking advice from someone who does not have a unique understanding of your financial life could lead you to take on inappropriate risks or leave you with a costly decision that impacts you long term.

What is a Financial Planner?

A financial planner collaborates with you to organize your financial life and helps you understand how your resources can help you achieve your goals. A planner will analyze your current situation and use their expertise and insight to optimize your wealth and set you up for success. Topics may include retirement planning, college planning, asset allocation, tax strategies, estate planning, investment research, debt management, cash flow analysis, income planning, employee benefits optimization, insurance and risk assessments, small business strategies, career planning, and more. A financial planner can help you develop your roadmap with confidence.

More than just the numbers, a financial planner is a partner you can trust to take the stress and overwhelm out of your financial life. They are there to guide you through the ups and downs of market cycles and ensure you are executing your plan. A planner can prevent you from making reactionary mistakes like trying to time the market or jump from one investment bandwagon to the next. They are there for you during life’s transitions. And they are your confidant you can lean on when goals and life look messy and you’re trying to figure out how to pivot or which direction to take.

Are you unsure what to ask a financial planner? Make sure to read Top 10 Questions to Ask a Financial Planner.

Why would I need ongoing planning?

The most impactful difference a financial planner can make is during times when life is changing the most. And the compounding impact of smart financial decisions earlier in life can turn into much bigger wealth numbers later on.

For a retiree, there is a monumental transition in switching from paycheck to living off of your life savings. At the onset, a retiree may have the desire to spend more on travel and exploration as they actively pursue new projects and passions. As time progresses, they may consider downsizing a home or eventually relocating to an inclusive facility as one ages. There can be a complex transition that happens with additional caregiving roles and the eventual loss of a spouse.

By contrast, imagine all the ways life changes for someone during their career. I’ll share with you my timeline (and potential future timeline) as an example.

The Teens: Started college, bought first car, first job, moved out of parent’s house

The Twenties: Graduated college, new job, got married, bought a house, changed career, went back to grad school, moved to a new city, became a landlord, bought new car, welcomed baby #1

The Thirties: Welcomed baby #2, sold house, bought house, bought new car, spouse changed jobs

The Forties: Started a business, child #1 goes to college, child #2 goes to college, bought new car, home renovations

The Fifties: Travel more frequently, buy vacation property, expand business opportunities, increased savings

The Sixties: Care for elderly parents, retire, increase travel, welcome grandkids, execute Social Security claiming strategies, coordinate new retirement income planning needs with tax planning, begin Medicare and coordinate new health benefits, consider additional Roth conversions

The Seventies: Downsize home, move to a new city, gifts for grandkids’ college, new hobbies, increase charitable work and giving

The Eighties: Health event, update home to age in place, consider alternative living arrangements as we age

The Nineties: One of us will experience the loss of a spouse, long-term care needs, increased medical expenditures

The transitions we experience in life are what drive the need to collaborate with a financial planner. The financial impact of ongoing planning through this time period can be extremely beneficial in building long-term wealth and success. But as you can see, transitions happen at every age.

Each life event corresponds to a financial event – affordability and qualifying for mortgages, paying for college or student loans, child care, negotiating job packages and benefits optimization, savings changes, retirement plan changes, lifestyle and income adjustments, auto loans, short-term and long-term investment plans, merging household finances, life insurance and estate planning needs, financial support and health support for parents, and empty-nester cash flow changes. Should there be a death of a spouse, inheritance, or divorce, additional complexity arises and another cash flow change occurs.

Although each of these can be explained financially, there are usually emotional considerations that correspond to these decisions as well. A financial planner will not only explain the numerical analysis but will also discuss the pros and cons of alternatives that impact your lifestyle to help you make the best decision for you and your family.

While retirees still face a number of life events and planning needs for assets and income, the point is that you do not need to wait until you accumulate wealth to get help in building it. Look for a financial planner who fits your needs. It is time to reclaim your freedom so you can focus on your zone of genius at work and that feeling of security and success for your family at home.

Ask yourself what it would feel like to no longer worry and stress about money. What does it look like to shift the paradigm of exchanging your time at work for dollars in your pocket to the moment your dollars create more time for you to live and thrive on your own terms? Planning will help you get there.

It’s time for you to share your voice, take control of the future, and turn your visions into reality empowering you to design your best life.

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Cassandra Smalley, CFA, CFP® is a fee-only financial advisor for women located in St. Petersburg, FL, and works virtually with small business owners, moms, and families across the country.