How to Make Financial Planning Work for You

As the client, you are the focus of the financial planning engagement. As such, the results you get from working with a financial planner are as much your responsibility as they are those of the planner. To achieve the best results from your financial planning engagement:

Set Measurable Financial Goals.
Set specific targets of what results you want to achieve and when you want to achieve them. For example, instead of saying you want to be ‘comfortable’ when you retire or that you want your children to attend ‘good’ schools, quantify what ‘comfortable’ and ‘good’ mean so that you’ll know you’ve reached your goals.

Understand the Effect of Each Financial Decision.
Each financial decision you make affects other areas of your life. An investment decision may have tax consequences that are harmful to your estate plans. Or a decision about your child’s education may affect when and how you meet your retirement goals. Remember that all of your financial decisions are interrelated.

Re-evaluate Your Financial Situation Periodically.
Financial planning is a dynamic process. Your financial goals change along with changes in your lifestyle or circumstances, such as an inheritance, marriage, birth, house purchase or change of job. Revisit and revise your financial plan regularly to reflect these changes and stay on track with your long-term goals.

Start Planning As Soon As You Can.
Don’t delay your financial planning or wait until a money crisis to begin. People who save or invest small amounts early, and often, tend to do better than those who wait until later. By developing good financial planning habits such as saving, budgeting, investing and regularly reviewing your finances early in life, you will be better prepared to meet life changes and handle emergencies.

Be Realistic in Your Expectations.
Financial planning is a common sense approach to managing your finances to reach your life goals. It cannot change your situation overnight; it is a lifelong process. Remember that events beyond your control such as inflation or changes in the stock market or interest rates will affect your financial planning results.

Realize That You Are In Charge.
If you’re working with a financial planner, understand the financial planning process and what the planner should be doing. Provide the planner with all relevant information on your financial situation. Ask questions about the recommendations offered to you and play an active role in decision-making.

© 2006, Financial Planning Standards Board Ltd. All rights reserved. Through a licensing agreement, material in this section is based wholly or in part on copyrighted materials owned by Certified Financial Planner Board of Standards Inc. See our copyright notice for more.