Five Ways Financial Planning Can Help

Would you take a cross country road trip without looking at a map or plotting out your course? Likely not, unless you subscribe to a vagabond style of living and enjoy going wherever the breeze takes you. While there may be some fun in being free and without an agenda, unfortunately there is more ruin that waits for you when we apply a nonchalant or avoidant approach to our finances. Having a financial plan is crucial to your financial success because it serves as a road-map for your goals, like retirement, leaving a legacy or making sure that you have the means to just simply have some fun in life without being reckless.

Financial planning can be very beneficial for managing money matters and more importantly, accomplishing your goals and putting your dreams in motion. Here are five ways that your financial plan will make your financial situation improved:

Oversight and Organization

Everything needs to on the glass, visible for you to see. But there are a lot of moving parts. Whether your still accumulating wealth for your future or you are trying to figure out how or when to best use retirement accounts and time them with Social Security, the various cogs in the wheel can be challenging to manage without a plan in place. Your plan serves as a written document of your financial situation highlighting all the “guts” that go into making sure your personal bottom line is healthy.

Portfolio Coordination

You have a 401k with your current employer, an IRA that you have been investing in for some time, you’ve got a stock account and you’ve got some money being managed, is everything going the same way? Is there an overarching strategy in place? Or is your portfolio of becoming a bit of a hodge-podge mess? Your plan will be able to dive deep into your entire portfolio and determine exactly what you are invested in illustrating any over-allocated positions or misalignments. Without this level of detail, you could be taking on more risk than you want to, or you could be underperforming which translates to real money being left on the table.

Pressure Testing

Your cross-country adventure is going to have some challenges along the way. What if you blow a tire or get into a fender-bender? What is the likelihood of you reaching your intended destination? Your financial plan will run scenarios of varying performance to determine a measure of success called a Monte Carlo simulation. This iterative test will help act like an instrument on your dashboard, and a low Monte Carlo score is like that dreaded check-engine light signaling you that some changes are needed.


Your financial plan isn’t some auto-pilot however. There is still risk that can send you off course and most commonly, the reason why a plan goes awry is due to operator error. Investing in things that aren’t in line with your risk tolerance or making big purchase decisions without seeing the impact that they have on your trajectory can reduce your success measures. And when you are working with a financial planner, your plan is an operating agreement and source of truth that can be referred to when you are evaluating how your financial situation is evolving and progressing. When course corrections are needed, your plan is the document that will help keep the conversation objective and managed more effectively.


When the day comes that your beneficiaries are handling your affairs and celebrating your life, your financial plan can help relieve the headache that can come with settling an estate. Your plan will help them map out where you had been, what the rhyme and reason was for your portfolio composition. While your financial plan doesn’t replace the need for proper estate planning documents, it can help your loved ones and make their lives easier in a time of need.

You may already on the open road, the tank could be on full and cruise control set, no matter how well things look on surface, it’s important to pull out your map and check on your financial direction. Consider it good housekeeping, or at least wiping the bugs off the windshield at the next gas station. And if you haven’t done your plan yet and your compass is pointing all over the place, it’s time that we sit down and get you out of life’s passenger seat and into the driver’s so that your goals and dreams don’t remain a fantasy. Let’s get you to your destination and have some fun along the way!