Financial planning takes time and effort, but the end results of a good financial plan can be life changing. Planning for your financial future–both immediate and long-term–might not be as fun as planning or other things in your life, but the investment in your time will reap real dividends in both money and stress reduction.
Pablo Oliva, a wealth advisor with Northsight Wealth Management, LLC, says that financial planning isn’t something that only wealthy people need. “In short, everyone needs some kind of financial planning,” he says. “I always think of financial planning as having a game plan for every dollar you touch. Knowing where your money is going and how it can be used in a future date to buy a home, pass on a legacy, or pay for college are all parts of the financial planning process.”
Oliva, who frequently works with nurses, says that financial planning is not a one-and-done task, and that it can change depending on your own path. “Financial planning is a multi-step process that involves investments, risk management, estate, and tax planning,” he says. “The complexity of the financial planning process increases as our family dynamics change, assets grow, and needs change, but the fundamentals remain the same.”
And a financial plan isn’t always an intricate or involved process, but it will take some thought so you can consider what you’ll need funds for–with retirement planning, college and higher education planning, debt management, and estate planning some of the common topics in financial planning.
The first place to start, says Oliva, is with a budget because that familiarizes you with how your savings, spending, and income all converge. “Knowing how much money comes in and how much money goes out is the foundation for creating a positive cash flow,” he says. “Sticking to a budget creates healthy money habits, which translates to saving for a big purchase, saving for retirement in a 401(k) or IRA, and planning for the unexpected, amongst other goals.”
Does even thinking about a budget unnerve you? As Oliva says, knowing about your own money is better than not knowing. “I am a firm believer in self-education,” he says. Sometimes, a cultural aversion to talking openly about money can have a huge impact on how folks think about financial planning. If you don’t feel up for the challenge, then getting professional help, even just to get you started, is probably helpful. It’s important to find the best professional if you choose that route. “Financial planning is something that anyone can do, but most elect to partner with someone to ensure all topics are covered,” he says. “As clients, we should all conduct due diligence on whom we entrust our financial futures and sometimes our life savings.”
Once everything is documented, you might be surprised to see where you are. “Most clients we work with are in a better position than they think,” he says. “Realizing the need to plan for 20+ years in retirement can be mind-boggling, but with the help of the right professional, most guesswork can be removed and realistic goals and expectations set. We understand that everyone sees money differently, and most changes are broken up into smaller, realistic goals over a reasonable period of time.”
If getting your financial life in order seems entirely out of reach, take some tips from how you’d plan a trip. You don’t just walk out the door and go somewhere–you plan the time of day you’ll travel and the route you’ll take while adding in time for unexpected stops or weather snafus. You’ll probably look for the most efficient and cost-effective route. Then you might think of the expectations you have for the trip.
“A good financial plan is a roadmap to achieve what is important to each individual,” says Oliva. “The plan should also consider roadblocks and delays along the way and require periodical updates. Each financial plan is different based on the individual or family needs and should also change as their needs change with time.”
A legal disclosure from Northsight for this interview: Investment advisory services are offered through Northsight Wealth Management, LLC (NSMW), a Registered Investment Advisor. Northsight Wealth Management, LLC will only provide investment advisory services in jurisdictions where it is registered as an investment adviser or exempt from registration. Insurance products and services are offered and sold through individually licensed and appointed insurance agents. NSWM does not provide legal or tax advice.