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Financial planning is an unambiguously good thing. It helps individuals to live a more financially secure life and ultimately allows most to escape the trap of debt. Unfortunately, many have taken to looking at financial planning as an end unto itself. These individuals seek to save the most money possible for the sake of saving that money. For most, though, this isn’t a particularly useful way to live a life. Instead, it might be better to go through a bit of life planning before one even starts to financially plan. This will not only help to provide individuals with goals, but it will give financial planning a reason.
When you sit down with a financial planner, it’s important that you figure out exactly why you are looking to put together a sound financial plan. It’s fine to say that you want to make sure you have some kind of financial freedom, but it’s better to understand where you want that freedom to take you. Is it important to you that you have the freedom to travel? If so, that probably means having more liquid assets available. Do you want to create a charity? That might mean looking at specific types of investment tools. The more you know about your life path, the better your plan will be.
It’s also useful to create a life plan for your financial plan because it will help you to determine how aggressively you need to be saving. If you are looking to get the most out of your twenties, for example, you might not want to start dedicating half of your paycheck to an IRA right away. If your biggest goal is to leave a legacy for your children, though, you’ll want to have a more aggressive savings plan. Both of those possibilities can be handled with a financial plan, but they require a bit of human direction to succeed.
Consider setting up a fully-featured life plan before you start worrying about the financial planning. The two should work together, but you need the former in place before the latter. With a good life plan ready, you can start to make financial decisions that can do more than help you generate wealth. This is the kind of planning that will help you to make headway in the areas of which you are the most.