Comprehensive Financial Planning: Helping You See the Big Picture
By Mark Yatros
Do you dream of buying a new – or even a second – home? How about helping your kids pay for college, so they graduate without debt? Or maybe you envision a retirement full of leisurely days exploring new hobbies.
Whatever your dreams, they all have a price tag attached, and creating a comprehensive financial plan will help make them possible.
The term comprehensive financial planning may sound intimidating. But, with the right guidance, it doesn’t have to be daunting, and better yet, your comprehensive financial plan will give you a roadmap to making your dreams a reality.
What is comprehensive financial planning?
Simply put, comprehensive financial planning is an all-inclusive, long-range look at your entire financial life including:
your goals
net worth
cash flow
insurance
estate planning
taxes
We’ll cover each of these categories later in this blog. But first, let’s look at why a comprehensive financial plan is helpful to your future.
Why do I need a comprehensive financial plan?
Comprehensive financial planning is vital to building wealth. Often, people view financial planning simply as investing, but it is much more. To build wealth, you must consider not just making money but saving it. This means accruing wealth not only by earning money and making smart investments but by saving money by minimizing taxes and spending.
One of the main advantages of having a comprehensive financial plan is that it can help you put your financial goals in order. A financial plan will clearly show you how your financial goals are related – for example, how saving for your children's college education might impact your ability to save for retirement. Then you can use the information you've gathered to decide how to prioritize your goals. You’ll also decide how to implement specific strategies and choose suitable products or services. And, in the end, you’ll know that your finances are headed in the right direction.
The financial planning process
While you could create and implement your comprehensive financial plan yourself, most likely, you’ll want professional guidance. A financial professional will provide an objective viewpoint on your current financial status, help you prioritize your financial goals, and create a realistic roadmap to achieve your goals. A professional will save you time and don’t forget, they understand the financial markets and the products and services that could assist you in achieving your goals.
Consider working with a financial professional to:
Develop a clear picture of your current financial situation by reviewing your income, assets, and liabilities and evaluating your insurance coverage, your investment portfolio, your tax exposure, and your estate plan
Establish and prioritize financial goals and time frames for achieving these goals
Implement strategies that address your current financial weaknesses and build on your financial strengths
Choose specific products and services that are tailored to help meet your financial goals
Monitor your plan, and adjust it as your goals, time frames, or circumstances change
Monitoring your plan
The financial planning process doesn't end once your initial plan is created. Your financial plan should normally be reviewed at least once a year to make sure it still meets your needs. Also, when your life circumstances change, or there are fluctuations in the markets, you may need to alter your plan.
Some of the events that might trigger a review of your financial plan are:
Your goals or timeline changes
You get married, have a child, health problems occur, or you experience a job loss
You have a specific or immediate financial planning need, such as managing a distribution from a retirement account or paying for long-term care expenses
Your income or expenses significantly increase or decrease
Your investment portfolio hasn't performed as expected
You're affected by changes to the economy or tax laws
What to consider in your comprehensive financial plan
When creating your comprehensive financial plan, Allegiant Wealth Strategies experienced financial professionals will consider:
Your overall net worth
Your overall net worth is the total of what you own minus what you owe.
Your cash flow
Cash flow is the amount of money you receive each month. This includes your take-home pay plus other items, such as child support, tips, and rental income.
Your goals
Having a solid idea of your financial aspirations is key in creating a comprehensive financial plan. Among possible considerations are:
how you’ll pay for your kids’ education
when you’d like to retire
if you’d like to save for a big vacation
if you’d like to start a business
Your Insurance Coverage
Your life insurance needs should be considered as part of your overall financial plan, with consideration given to your goals for savings and retirement, as well as tax and estate planning. As your life changes, your financial goals may change, as well as your need for life insurance, making it important to also review your coverage occasionally.
In addition to life insurance, a financial professional will guide you on other types of insurance, such as:
Disability
Long-term care
Health coverage (also HSA vs FSA)
Auto
Homeowners
Umbrella (property and casualty)
Allegiant Wealth Strategies experienced financial professionals will check your policies to see if you have enough insurance coverage under all the categories and help compare plans from different companies.
We will also look at your employee benefit package options to ensure you take full advantage of everything your employer offers.
Your estate plan
An estate plan is an important part of your comprehensive financial plan. It will determine who will make financial and health care decisions for you as well as which life-extending medical care you want if you become unable to make decisions yourself and who oversees your estate after your death.
In preparing your estate plan, the Allegiant Wealth Strategies team will consider if you need:
A will and trust
An advance health care directive
A durable power of attorney
Taxes in retirement
Once you retire, you may be able to escape the workaday world, but you can’t avoid taxes. Our team will help you plan so you’ll have a very good idea of your tax obligations during retirement.
What does a comprehensive financial plan do for you?
Once your comprehensive financial plan is in place, you will have confidence that you’re doing all you can to secure the financial future you desire. With a financial plan in place, you'll be better able to focus on your goals and understand what it will take to reach them.
If you’re ready to begin the process of creating your comprehensive financial plan, you can schedule a free, no-obligation consultation with Allegiant Wealth Strategies’ team of experienced financial advisors here.
This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to ensure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.
Allegiant Wealth Strategies offers securities and advisory services through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser. Fixed insurance products and services are separate from and not offered through Commonwealth Financial Network. Allegiant Wealth Strategies has offices in Battle Creek and Portage, Michigan, from which we serve Calhoun County, Kalamazoo County, and Kent County (Grand Rapids). The Allegiant Wealth Strategies team offers no-obligation financial planning consultations; call 269-218-2100 or contact us here.