A comprehensive financial plan is an invaluable resource at every stage of life. Based on your current financial standing, personal goals and related financial objectives, it provides a roadmap to achieving future success.
But it doesn’t stop there. A dynamic financial plan can help you navigate significant life changes like the end of a career or the transition to an empty nest—or even unexpected events—as they arise.
“I characterize such events as triggers—new elements in a person’s life that bring uncertainty, which many times lead to stress,” says Lauren Oyster, an Atlanta-based Certified Financial Planner (CFP) and Wealth Planning Manager with SunTrust Bank, as well as a Registered Representative with SunTrust Investment Services, Inc. “During those times of transition, it’s important to re-evaluate your priorities from a financial perspective and determine whether you need to make any adjustments in your plan and, in turn, in your financial behaviors.”
Have conversations early (and often)
Before you can actively address one of life’s “triggers,” you need to create a list of priorities with your advisor.
“Part of the initial planning process is to prioritize the goals and objectives that are most important to you. This list allows you and your advisor to identify the strategies and tactics necessary to accomplish those objectives,” Oyster says.
As a living document, a financial plan not only reflects your immediate financial situation, but it also provides a framework for managing shifting priorities. Oyster suggests that regular reviews—ideally once or twice a year—help re-align your perspectives, alert you to any changing needs or behaviors and ensure that you’re still on track for achieving your objectives.
“During plan reviews you’ll examine whether or not you took action on those key objectives,” Oyster says. “If not, you explore why not and reset your priorities going forward”
The process itself has valuable benefits, notes Oyster. “Planning exercises with an advisor help you learn a great deal about your own financial preferences and habits that have guided you to your current financial standing,” she says. “Achieving this awareness can be very rewarding. With awareness, you are less likely to make mistakes a second time.”
Adjust to meet life’s changing needs, demands and surprises
Circumstances and events will inevitably shift as you move through life’s various stages, causing your priorities and goals to change. That means adjusting the plan to fit those changes.
A financial plan for young adults, for example, likely includes foundational concerns, such as reducing debt, beginning to build retirement savings and establishing healthy financial habits around saving and spending.
Further down the road, you should account for the possibility—and financial realities—of a growing family. At the same time, identifying long-term goals around retirement savings, children’s education costs and potential long-term care needs of older family members are important factors in the planning process.
“You’ve got to be flexible with your planning and adaptable to new situations,” says Dr. Mary Gresham, an Atlanta-based psychologist who specializes in financial matters. “Many times, when people feel overwhelmed by finances they start to avoid things, such as bank statements and brokerage accounts, which is one of the worst things you can do when you’re anxious about money.”
Following your financial plan—even during times of upheaval—is critical, Oyster says. “People who understand the need for financial planning early and revisit their priorities and goals regularly are generally more successful. If they know why and what and—with an advisor’s help—can understand how, they will generally take action more quickly in order to achieve their objectives.”
Use available resources to refine your plan
Thanks to today’s technology, the planning process is more streamlined than ever. Solutions such as SunTrust SummitView can quickly provide a wholistic perspective on your financial life.
This web-based planning resource allows you to collect investment, credit card, loan and life insurance data from any financial services firm you do business with and generate a thorough on-demand overview. Furthermore, SummitView allows you and your advisor to test “what-if” scenarios through illustrating the impact of changes to your personal circumstances, along with theoretical market volatility or other tradeoffs. It provides an objective view of how priorities may need to be adjusted.
Of course, there are other online financial management tools available, many for free. These may be limited in breadth and depth, however, and generally do not effectively explore the behaviors and financial habits—good and bad—that help shape your overall financial condition.
Ultimately, whichever online resource you choose, it can’t replace the perspective of a thoughtful advisor who can provide support at every stage of your life.
“It’s really hard to counsel ourselves. The success or failure of many of our goals tie directly back to our own behavioral mistakes along the way,” Oyster says. “That’s why it’s so important to have an advisor walk you through the planning process and hold you accountable for your actions in order to help you meet your goals.”
“Planning is not just numbers,” Oyster says. “It’s gaining self-awareness and facing your financial fears.”