What Is Financial Planning

Financial planning simply put is the process that you use to help you make sensible decisions about your money to help you achieve your goals. A financial plan will consist of several different components including expenses, and projections. It also involves putting measures in place to ensure that your financial well being is taking care of.

The Six Steps of Financial Planning

A Financial Plan will consist of 6 steps:

Step 1: Think about the goals that you want to achieve in life. Consider all of the necessary expenses that will derive from these goals.

Step 2: Figure Out Your Current Situation. Write out what assets and liabilities you have. Write down anybody that you owe and any investments you have.

Step 3: Look Closely At Your Current Financial Position. This means looking at how close you are to achieving your goals that you have set.

Step 4: Develop your plan. This can be done on your own or with a financial adviser. Work out a road map for achieving SMART goals. Discuss with your adviser to determine if your goals are attainable or not given your current situation.

Step 5: Put your plan to the test. Implement it. Make the changes that you outlined in your plan and make a difference. A plan is nothing without action behind it.

Step 6: Monitor the plan and review the results at least once a year. If something is not working, then take some time and make adjustments where needed. Remember this is your plan, and as such it should be tailored to what works best for you. There is no need to stick with a plan that works for someone else but is ruining you.

Do You Need A Financial Advisor

A financial plan can be created and monitored by you alone. There is no mandate that you get a financial advisor to help you get your finances in order. There is huge benefit to working with a financial planner though. A financial planner understands the nuances needed to help you get where you want to go. As with all experts, it helps to consult with them to avoid pitfalls that a novice wouldn’t consider or be prepared for.

So What is The Difference Between a Financial Planner and A Financial Adviser

A financial adviser is a professional that helps or advises a person or company to create a program to meet long-term financial goals. A financial planner is a type of financial adviser that specializes in a specific part of the financial suite. Financial planners are the individuals that help you come up with specific plans to help you achieve your goals. Further, the financial planner may hold various licenses or designations.

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Financial Advisors in Birmingham

McClellan Wealth Management is a boutique investment advisory and financial planning firm in Birmingham, AL. We offer tailored solutions to help you accomplish your financial goals. For more information about financial planning or to get in contact with a financial planner feel free to give us a call.