The Importance Of A Financial Plan (Especially In Times Of Crisis)

The Importance Of A Financial Plan (Especially In Times Of Crisis)

| April 17, 2020
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When the unexpected happens, chaos can result. And right now, chaos and change seem to be a part of daily life for all of us due to the ever-evolving coronavirus pandemic. More than ever, preparation and having a plan of action in place is necessary for you to do what’s best for you and your family in the midst of this crisis.

And when I say plan and prepare, I’m talking specifically about a financial plan. Having a financial plan means having all the details of your financial life in one place, including your savings, debt, assets and investments, life insurance, and other elements that apply to your unique financial situation (1) so that when a crisis hits, rather than resorting to panic or stress, you can rely on a thorough plan of action for handling your finances. Here are some of the many ways a financial plan can make a difference in your life. 

Be Ready When Chaos Comes

Let’s start with the elephant in the room, or more accurately, the potential virus in the room. This is not the first time (and it won’t be the last) there has been a threat to your health, lifestyle, or money. Since we know this reality, being prepared for when, not if, these circumstances arise is key for creating stability and security, no matter what comes your way.

When there is a comprehensive plan in place, panic is eliminated and rash, emotional decisions can be avoided. Financial plans set people up for success no matter what life or the economy throws your way. Everyone deserves to have that chance. 

Achieve Your Goals

Did you know you are 42% more likely to achieve your goals if you write them down? (2) Having a financial plan is not just about managing your money, it’s about making sure the time spent to earn your money is used to reach the dreams you have for you and your family, giving you a life full of satisfaction and contentment. 

What do you want for your life now and in the future? What about your loved ones? Whether it’s vacations, having more time at home, putting your kids through college, retiring with dignity, or some other dream, chances are that it involves having enough money to feel financially secure and knowing where and how to allocate that money. 

Creating a financial plan now will get you one step closer to making the future you desire a reality.

Secure Your Future

A financial plan covers everything from basic to complex financial matters with the goal of securing your future. It can help you:

  • Know your current situation by creating a budget.
  • Have emergency savings for when unexpected expenses arise or to weather a potential job loss.
  • Add up how much debt you have and calculate how much of your monthly income is going toward minimum payments. Create a plan of action for paying down those debts.
  • Determine the household income you need to earn in order to reach your goals.
  • Understand how much you need to invest per month for retirement, which is something a trusted financial advisor can help you determine.

Are You Ready To Create A Financial Plan?

If you don’t already have a financial plan in place, now is the time to create one. And as you’re likely spending a lot more time at home lately, it’s a great opportunity to tackle this task. We know this can feel daunting, but remember that our team at ClientFirst Wealth Management is here to guide you. We can assess your current financial situation, help you make the necessary changes, or affirm that your investments are exactly where they should be. Don’t hesitate to call (501) 603-0406 or email me at ed@clientfirstwm.com to schedule a consultation. 

About Edward P. Mahaffy, MBA, CFP®, ChFC®

Ed founded ClientFirst Wealth Management in 2007, after more than 23 years in the wealth management industry. Prior to launching ClientFirst, he spent 6 years as a portfolio manager and branch manager with Raymond James, 6 years as a vice president and portfolio manager with Merrill Lynch, and over 11 years as a financial advisor and fixed-income portfolio manager with Stephens, Inc. 

Designated as a Certified Financial Planner and Chartered Financial Consultant, Ed holds a Bachelor of Science in Business Administration from The Citadel and earned his MBA from the University of Arkansas. He is also a member of the Financial Planning Association (FPA). Ed has had articles published in The Arkansas Banker as well as Barron’s magazine and is a member of the National Association of Personal Financial Advisors (NAPFA). He is also the author of How to Select a Financial Advisor: The Least You Should Know.At ClientFirst, Ed is president and senior portfolio manager. 

Disclosures

The views expressed represent the opinions of ClientFirst Wealth Management, LLC (“ClientFirst”) and are subject to change. These views are not intended as a forecast, a guarantee of future results, investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial or legal advice or service to any person.

Additional information, including management fees and expenses, is provided on ClientFirst’s Form ADV Part 2, which is available at https://adviserinfo.sec.gov/firm/summary/120286.

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(1) https://www.nerdwallet.com/blog/investing/what-is-a-financial-plan-how-can-i-make-one/

(2) https://www.cnbc.com/2019/09/13/self-made-millionaire-how-to-increase-your-odds-of-success-by-42-percent-marie-forleo.html

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