The idea of financial planning is, by its nature, about managing your finances. But can it go beyond simply adding to your pile of wealth or growing investments? Can a financial plan help you in other areas of your life? It can, and here are a few ways it does just that.
1. You Learn What You Value
When you make definite plans for the financial resources you work hard for, you learn about yourself. For example, as you analyze your spending patterns, you begin to see what you spend the most on or the least on. Is it spending on family and loved ones? Is it charitable giving? Do you value experiences over assets? Are you a long-term thinker or one who prioritizes current enjoyment?
Patterns that form within how you earn or use your money help you set goals and priorities that are more fulfilling in all areas of life. If you add up your charitable donations and decide it's not as much as you thought, for instance, you might use planned giving methods to boost this number and experience even more of the joy of giving.
2. You Plan for Loved Ones
Wealth management is about more than just growing money for yourself. It is also your opportunity to express your love for family and friends. The biggest means to do this is through good estate planning — providing financially for loved ones.
While still alive, though, you can express your feelings to others through your finances. You might set up an account specifically to help pay for college for younger family members, to invest in friends' small businesses, or to pay specific expenses like medical bills or down payments when you see a need. Even setting a good example of financial management teaches your kids lifelong good habits.
3. You Create a Legacy
When you're gone, your assets will craft your legacy. What do you want to leave behind? This might include charitable giving, trusts, a foundation, and financial arrangements for your heirs. The plans you put in place for your wealth make that legacy happen. It could be a personal legacy, like ensuring your kids go to college, or it might be a public one such as helping your favorite charity open their new facility.
Which of these benefits from good financial planning could enhance your life the most? No matter whether you want to find out more about yourself, help loved ones, or create a lasting effect when you're gone, a holistic plan can make it all work. Learn more about financial planning and wealth management planning by meeting with a planner in your area today.
Share30 December 2020
I still remember the day that my wife and I bought our first home. We were excited about filling the place with new furniture and looking for great area rugs. Unfortunately, before we knew it, we found ourselves deeply in debt. It was difficult to dig our way out, but over the course of the next several years, we were able to make things right. I want to teach other people how to manage finances so that they can avoid the turmoil that we went through. Financial planning might seem impossible, but with a little practice, I know it can become second-nature.